Almaty’s rating affirmed at “BBB”, outlook stable

Fitch Ratings, a leading global credit rating agency, has affirmed the City of Almaty’s Long-Term Issuer Default Ratings (IDR) at “BBB” with a Stable Outlook, Kazinform News Agency reports.

This decision reflects Almaty’s robust financial profile, with Fitch assessing its standalone credit profile (SCP) at “bbb+”. However, the city’s IDRs are capped by Kazakhstan’s sovereign credit rating of “BBB” with a Stable Outlook.

Almaty’s rating is supported by strong revenue generation, primarily from taxes, which are expected to grow to 2.2 trillion tenge by 2028. Capital expenditures are also on the rise, with the city planning annual infrastructure investments averaging 734 billion tenge over the same period.

Despite these strengths, Fitch highlights that Almaty's fiscal framework is shaped by Kazakhstan's centralized tax policies, which determine tax rates and allocations. Additionally, the city's expenditure flexibility is influenced by mandatory operating expenses and annual contributions to the state budget.

The Stable Outlook is based on expectations that Almaty will maintain a strong financial position, with its payback ratio remaining below 5x through 2028. A downgrade could occur if the city’s debt payback ratio deteriorates or if Kazakhstan’s sovereign rating is reduced. Conversely, an upgrade could follow improvements in the sovereign rating or sustained financial strength.

As Kazakhstan’s largest economic and financial center, Almaty continues to play a vital role in the national economy, contributing 20% of the country’s GDP.