Three major global credit rating agencies mentioned that the impeachment of South Korean President Park Geun-hye is unlikely to have a negative impact on South Korea’s sovereign credit rating.
Fitch made such a comment on December 14, adding that South Korea is firm enough to endure it. “In the mid-term, economic activities in South Korea is unlikely to be affected by the collapse of politics,” it mentioned and maintained its GDP growth forecasts for next year and 2018 at 2.5% and 3.0%, respectively. “The corporate restructuring process that is currently ongoing in South Korea can be a burden on the country’s GDP in the short term, but vigor will be added to its production and distribution of resources in the long term,” it continued to say.
Earlier, both Moody’s and S&P said that the impeachment of the President can be a burden in the short term but is insufficient to drag down the sovereign credit rating. “The impeachment has triggered uncertainties with regard to the future leadership of South Korea but it will not affect the government’s functions and policy planning,” Moody’s mentioned.
S&P echoed by saying that the political uncertainties can lead to a delay in the handling of a lot of bills but it is not planning on any credit rating adjustment for that reason.