Fitch downgrades Kazakhstan's rating to 'BBB'

Baku. 2 May. REPORT.AZ/ Fitch Ratings has downgraded Kazakhstan's Long-term foreign currency Issuer Default Rating (IDR) to 'BBB' from 'BBB+' and local currency IDR to 'BBB' from 'A-'. The Outlooks are Stable, Report informs refeerring to the website of the Fitch Raitings. 

'The issue rating on Kazakhstan's senior unsecured foreign currency bonds has also been downgraded to 'BBB' from 'BBB+'. The Country Ceiling has been revised to 'BBB+' from 'A-' and the Short-term foreign-currency IDR affirmed at 'F2'', the press release of the company says.

Fitch expects the economy to contract by 1% in 2016, well below the five-year average of growth of 4.6% and the 'BBB' median of 3.3%. Declining real wages and a sharp fall in dollar income will cut consumer spending'. GDP per capita has fallen sharply from USD 14,828 in 2013 to USD 7,102 in 2016 - below the 'BBB' median.

'The macroeconomic dislocation following the introduction of a free floating exchange rate in August 2015 (the tenge has fallen 77% against the US dollar) is expected to persist over the coming months. Inflation (15.7% in March) reached its highest level in nearly seven years', the company declares.