S&P - The Times Of Central Asia

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TCA Interviews

Suleimenov Says Stronger Policy Framework Supported Kazakhstan’s S&P Upgrade

A stronger monetary-policy framework, a resilient banking sector, and closer coordination with the government were among the strengths recognized in S&P Global Ratings’ upgrade of Kazakhstan, National Bank Governor Timur Suleimenov told The Times of Central Asia. “S&P’s upgrade of Kazakhstan’s sovereign credit rating from ‘BBB-’ to ‘BBB’ is an important external assessment of the resilience of our economy amid continued global uncertainty and commodity market volatility,” Suleimenov said. On August 21, S&P raised Kazakhstan’s long- and short-term sovereign credit ratings to BBB/A-2 from BBB-/A-3. The stable outlook reflects S&P’s view that Kazakhstan’s ample fiscal and external buffers should help it absorb external shocks, while the non-oil budget deficit is expected to narrow further. Kazakhstan last held the BBB rating before S&P downgraded it in February 2016. Kazakhstan now carries the same BBB long-term sovereign rating as India, Indonesia and Greece. It stands one notch above Hungary, Oman and Serbia at BBB-, and one below Bulgaria and Italy at BBB+. The comparison concerns credit risk rather than economic size or development. Why S&P Moved Now S&P expects Kazakhstan’s economy to grow by 5.1% in 2026 and by around 4% to 4.5% annually in 2027–2029, a pace it says exceeds that of peer countries. It also expects a broader tax base, tighter expenditure controls and reduced quasi-fiscal activity by major state-owned enterprises to improve the country’s fiscal position. Stricter rules governing National Fund withdrawals are intended to preserve the assets available to absorb commodity-price falls and other external shocks. According to the National Bank’s account of the decision, S&P also highlighted Kazakhstan’s substantial foreign-currency reserves and strong external position. A Stronger Monetary Framework “We particularly welcome the agency’s recognition of the strengthening of Kazakhstan’s monetary policy framework and the resilience of the banking sector to macroeconomic shocks,” Suleimenov said. Suleimenov had outlined that policy course in earlier interviews with TCA. In April, he described tighter monetary conditions alongside government fiscal consolidation, while in June, after the Bank cut its base rate from 18% to 17%, he cautioned that inflation had not been defeated and said further moves would depend on incoming data. Annual inflation declined from 11% in March to 10.2% in July. S&P cited a stronger monetary-policy framework, closer government-National Bank coordination, fiscal consolidation, reduced quasi-fiscal activity and tighter macroprudential regulation. It also described the banking sector as resilient, with adequate capital and liquidity buffers. The National Bank’s response went beyond the base rate. It increased minimum reserve requirements, used operations linked to gold purchases to absorb excess liquidity and supported measures to slow unsecured consumer lending. The Bank lowered the rate again to 16.75% in July as inflation eased. Even so, inflation remains more than double the National Bank’s medium-term target of 5%. S&P’s assessment recognizes the strengthening of the monetary-policy framework, not the end of Kazakhstan’s inflation problem. “Enhanced coordination between the Government and the National Bank, together with the continued improvement of regulation and supervision, is contributing to stronger macroeconomic and financial stability,” Suleimenov said. Fiscal Reform...

S&P Global Ratings Expects Kazakhstan’s GDP Growth to Slow in 2026

The international rating agency S&P Global Ratings has affirmed Kazakhstan’s long-term sovereign credit rating at BBB- and its short-term rating at A-3, while maintaining a positive outlook on the long-term rating. At the same time, S&P analysts expect economic growth to decelerate in 2026 and warn of persistently high inflation. According to commentary on S&P’s projections by analysts at the Halyk Finance research center, Kazakhstan’s GDP growth is forecast to slow to 4.1% in 2026. The projected slowdown is attributed to a 4% decline in oil production, weaker fiscal stimulus, and reduced consumer activity amid higher taxes and tighter credit conditions. In the medium term, for 2028-2029, S&P expects GDP growth to remain at around 4% or slightly higher. However, risks persist, particularly those related to geopolitical tensions and the continued sensitivity of Kazakhstan’s budget revenues and exports to fluctuations in global oil prices. For comparison, Kazakhstan’s GDP grew by 6.5% in 2025. In 2026, the government expects growth of 6.2%, a notably more optimistic projection than S&P’s estimate. Other international institutions have offered varying forecasts. The European Bank for Reconstruction and Development (EBRD) recently upgraded its 2026 GDP growth forecast for Kazakhstan to 4.7%, up from 4.5%. In contrast, the International Monetary Fund (IMF) in January lowered its 2026 growth forecast by 0.4 percentage points to 4.4%. Returning to S&P’s projections, the agency expects inflation to reach 11% by the end of 2026 and forecasts an exchange rate of 540 tenge per $1. Halyk Finance analysts stated that they broadly agree with S&P’s GDP and inflation forecasts. However, they consider the risks of further weakening of the national currency to be greater than the agency anticipates. According to their estimates, the exchange rate in 2026 could depreciate to 580-590 tenge per $1. S&P also expects the Kazakh government to continue fiscal consolidation in the medium term by expanding the tax base and tightening control over public spending, while preserving substantial liquid reserves. Over the next three years, the government does not plan to withdraw additional funds from the National Fund through targeted transfers or bond placements. The guaranteed annual transfer from the National Fund is set at $5.5 billion, half the $11.1 billion withdrawn in 2025. “We share S&P Global Ratings’ positive assessment, provided that the government strictly adheres to its fiscal consolidation commitments and reduces transfers from the National Fund,” Halyk Finance concluded. The Times of Central Asia previously reported that the IMF believes Kazakhstan’s current GDP growth rate exceeds the country’s long-term economic potential, thereby increasing inflationary pressures and signaling potential overheating of the economy.

Kyrgyzstan Signs Agreement with Leading Ratings Agencies

The Kyrgyz Ministry of Economy and Commerce has signed an agreement with the ratings agencies S&P (Standard and Poor's) and Fitch. In a statement, the ministry said: "To build the republic's potential in the international arena and to enter international markets, it is necessary to cooperate with the three big international rating agencies: Moody's, S&P, and Fitch." This week, Minister of Economy Daniyar Amangeldiev met with representatives from S&P and Fitch and Oppenheimer Europe Ltd's investment bank. Oppenheimer Europe Ltd. will act as a consultant for work with the rating agencies. The parties discussed the prospects of strengthening cooperation and joint work in assessing credit risks and Kyrgyzstan's investment attractiveness. “The parties expressed readiness to work on actively assigning and improving long-term rating. This will create prerequisites for strengthening the confidence of partners and investors”, the agencies commented. Rating agency representatives informed Kyrgyz officials about the need to assign a credit rating and the stages of entering international capital markets. In 2015, the Ministry of Economy of Kyrgyzstan signed an agreement with rating agencies Moody's and Standard and Poor's, giving the country an international credit rating for the first time. In 2016, the Kyrgyz authorities rejected the services of Standard and Poor's, for unnamed reasons. In May 2024, Moody's raised Kyrgyzstan's credit rating from negative to stable. Contrary to the agency's forecasts, Kyrgyzstan's economy and budget indicators have been virtually unaffected by Western sanctions imposed on Russia, the country's largest trading partner.