Moody's upgrades Kazakhstan

Moody's Investors Service said it upgraded the government of Kazakhstan's local- and foreign-currency long-term issuer rating to Baa2 from Baa3 and changed the outlook to stable from positive. Concurrently, the agency raised the foreign-currency senior unsecured debt rating to Baa2 from Baa3.

Moody's said it based the upgrade on the assessment that Kazakhstan's sovereign balance sheet and credit profile demonstrates resilience consistent with peers at the Baa2 rating level.

“This resilience is underpinned by the size and effective use of the country's sovereign wealth assets, which Moody's expects will grow and continue to exceed the level of government debt for the foreseeable future, as well as the lengthening and ongoing track record of credible enhancements to the macroeconomic policy framework that promotes external stability,” the agency said in a press release.

“The stable outlook reflects balanced risks. On the upside, ongoing institutional and economic reforms may strengthen Kazakhstan's governance framework and raise the country's attractiveness as an investment destination with the potential to accelerate the process of economic diversification, although Moody's expects tangible benefits to take time to materialize. On the downside, any renewed weakness in oil prices, protracted cuts to oil production and/or significant slowdown in the domestic economic recovery due to still high coronavirus infections in the country may weigh on government finances and Kazakhstan's credit metrics,” Moody’s said.

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