S&P changes its outlook for Kazakhstan sovereign rating to negative

The rating agency believes that Kazakhstan is still vulnerable to potential failures in the Caspian Pipeline Consortium (CPC)

S&P Global Ratings has downgraded its outlook on the sovereign credit rating of Kazakhstan from «Stable» to «Negative.» At the same time, S&P has reaffirmed its “BBB-/A-3” long- and short-term foreign and local currency sovereign credit ratings on Kazakhstan. 

The transfer and convertibility assessment also remains “BBB.”

«The negative outlook reflects risks to Kazakhstan’s oil exports through the CPC pipeline, the pipeline that the country uses for about 80% of its oil exports, as well as rising debt financing costs,» S&P said.

According to the agency’s analysts, any potential disruption in the operation of the CPC could negatively affect the country’s economy and finances.

“Increasing reliance on domestic funding and rising borrowing costs could increase Kazakhstan’s debt-servicing burden. As a result, we have updated our outlook on the sovereign credit rating of the Republic of Kazakhstan from ‘Stable’ to ‘Negative’ and affirmed the country’s sovereign credit ratings at “BBB-/A-3,” S&P said.

Over the period from 2022 to 2025, Kazakhstan’s GDP is expected to grow by 3.6% on average thanks to growth in the oil and non-oil industries.

Amid the war in Ukraine, the inflation rate will be quite high, while the rate of fiscal adjustment can slow down instead. President Kassym-Jomart Tokayev is expected to stay in office after early presidential elections and political reforms are going to be quite modest if the government decides to proceed with them.


The agency also believes that Kazakhstan’s government will remain aimed at diversification of the economy, developing the private sector and raising the welfare of the population.

In April, S&P Global Rating affirmed Kazakhstan’s sovereign credit rating at “BBB-/A-3” and maintained a stable outlook based on the huge foreign assets the country possesses and the relatively low level of reliance on external financing.

Also, S&P said that both the long-term credit rating on Tengizchevroil “ВВВ-” and its national rating “kzAAA” are about to be lowered due to rising geopolitical risks.

Tengizchevroil is a Kazakhstani oil company with several international stakeholders including Chevron (50%), ExxonMobil Kazakhstan Ventures Inc. (25%), KazMunayGas (20%) and LUKArco (5%). The company has been operating since 1993.

In March, S&P lowered the long-term sovereign rating in foreign currency on Russia from “ВВ+” to “CCC-” and its long-term rating in the national currency from “ВВВ-” to “CCC-.” Both ratings have been added to the agency’s CreditWatch with a negative outlook.

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