Fitch upgrades Kazakhstans long-term foreign currency rating to BBB.

By bne IntelliNews November 22, 2011
Fitch upgraded Kazakhstans long-term foreign and local currency issuer default rating to BBB from BBB- and to BBB+ from BBB respectively. The outlook on the ratings is positive. At the same, the countrys ceiling was upgraded to BBB+ and short-term foreign currency issuer default rating was affirmed at F3. The agency noted that Kazakhstan's sovereign balance sheet has strengthened, with sovereign net foreign assets affording a growing cushion against revenue shocks, and underpinning the positive outlook. Moreover, Fitch forecasts that the government will record a surplus of 6%-7% of GDP in 2011-2013. Oil price assumptions in the budget are conservative and the government would be in surplus in 2012 even if the oil price dipped to USD 80 per 1 barrel. Mining and oil production growth underpins one of the strongest growth outlooks among the major emerging markets, thanks to credible projections of increased oil and mining output, Fitch noted. Moreover, GDP is expected to grow by 6% in 2011-13 and should be relatively resilient to slower growth in major advanced economies. The main risk comes from a severe downturn in commodity prices or external demand. The agency also considers that domestic or regional political shock could exert downward pressure on the rating. To remind you, S&P raised its rating of Central Asia's largest economy earlier this month based on a fiscal and current account surplus that emerged due to strong prices on is energy exports. Then, head of National Bank of Kazakhstan Grigory Marchenko urged the other rating agencies to raise the countrys rating.

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