Kazakhstan gets better rating than Russia from Fitch.

By bne IntelliNews November 21, 2012
Fitch upgraded Kazakhstan's long-term foreign currency issuer default rating (IDR) to 'BBB+' from 'BBB' and long-term local currency IDR to 'A-' from 'BBB+'. The outlooks are stable. Thus, Kazakhstan received better ratings than Russia from Fitch. The agency also upgraded the country ceiling to 'A-' from 'BBB+' and the short-term foreign currency IDR to 'F2' from 'F3. The action reflects the continued strengthening of Kazakhstans sovereign external balance sheet, low level of government debt and healthy growth prospects as well as tentative steps towards cleaning the banking system, Fitch has explained. The agency also considers that sovereign assets saved in the National Oil Fund gives a cushion against economic shocks. The agency expects Kazakhstans trade surplus at around 3% of GDP in 2013 (if 1 barrel of oil cost USD 100). Fitch also projects the general government budget to remain in surplus even if oil prices decreases to USD 80 per 1 barrel. At the same time, Fitch expects Kazakhstans GDP not to reach 5% this year due to a slowdown in the extractive sector and in external demand and due to the impact of a drought on agriculture. The agency however noted that domestic demand partly compensated thanks to strong wage growth and moderate inflation. Fitch expects GDP to pick up in 2013-2014 as oil and mining production will increase based on capacities increases underway. The agency also noted that a positive rating actions would likely require a substantial strengthening of the sovereign and external balance sheets over the medium term.
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