Kazakhstan’s foreign debt increased by $531.5m to $153,987.8m in January-March. As the Kazakh economy is experiencing recession the ratio of foreign debt to GDP is growing: to 92.3% in March 2016 from 83.2% at the end of 2015. The ratio of the National Oil Fund’s assets to short-term foreign debt stood at 120.4% in March, whereas, according to international standards (the Guidotti-Greenspan rule), the ration should be no less than 100%. As a result, Kazakhstan maintains sufficient reserves to service cumulative foreign debt.

Gross foreign debt grew in the given period as a result of increase in interfirm debt which in reality covers direct investment operations in the form of loans foreign companies issue to their subsidiaries or branches operating in Kazakhstan. In the first quarter of 2016 cumulative interfirm debt reached $82,842.2m (53.8% of the country’s total debt), increasing by $1,003m. With interfirm debt excluded, Kazakhstan’s foreign debt decreased by $471.2m to $71,145.6m.

Public foreign debt increased insignificantly – by $15.9m – to $12,207.5m in the first quarter of 2016. Non-public debt stood at $141,117.06m or 91.6% of total foreign debt in March 2016. It grew by $518.1m in the first quarter. The Netherlands was Kazakhstan’s largest creditor, above all, due to interfirm debt.

Debt in foreign currency stood at $136,326.8m in March 2016, whereas debt in the national currency was only $4,367.1m. Most foreign debt has a floating interest rate (100,368.4m). This means that Kazakh borrowers’ repayment conditions worsen if the economic crisis protracts, credit ratings get lowered and the national currency depreciates further.

Kazakhstan’s payments on principle debt and interest totalled $6,543.3m in the first quarter of 2016. Kazakh borrowers should make payments to the tune of $17,938.8m in the remaining three quarters of the year, including interest payments worth $3,870.1m.