Fitch downgrades Kazakhstan

Fitch downgrades Kazakhstan: Fitch Ratings has downgraded Kazakhstan’s long-term foreign currency Issuer Default Rating (IDR) from BBB+ to BBB and its local currency IDR from A- to BBB.
“Off-balance sheet spending, in response to low oil prices, has resulted in Fitch’s broader measure of the budget deficit widening sharply to 5% of GDP in 2015, compared with a surplus of 3.5% over the previous five years, ” it explained in a press release issued yesterday. “Government debt jumped to 22.1% of GDP in 2015 from 13.9% in 2014, due to increased external borrowing as well as the sharp depreciation of the tenge.
Inflation reached its highest level (15.7% in March) in nearly seven years, the agency said. “While Fitch expects inflation  to moderate to 10% by end-2016, as the exchange rate pass-through fades, inflation is forecast to remain well above the ‘BBB’ median of 3.3% over the forecast horizon.”