'Korea Expected to Regain Growth Momentum in the Midterm'
International credit rating agency Moody’s maintained its credit rating and outlook for South Korea at "Aa2" and "Stable," respectively.
“Although the spread of COVID-19 is an unprecedented threat to the South Korean economy, it is expected to regain its growth momentum in the midterm,” it said in its credit opinion on April 6, adding, “Although the spread of the pandemic is likely to affect South Korea’s trade, supply networks, investment, tourism and so on and some industries and financial institutions are already under pressure, its impact on the sovereign credit rating of South Korea will be limited.”
It went on to say that whether South Korea’s credit rating will be lowered in the long term depends on whether the South Korean government will succeed in maintaining the country’s economic growth and fiscal stability amid the rapid aging of the population.
“Given that there is no sure-fire way to ensure permanent peace in the Korean Peninsula, military tensions are likely to be repeated periodically as seen in the case of the resumption of nuclear tests in the North early last year,” it mentioned, adding that military conflicts would act as a hindrance to the economy and national finance.
The agency’s credit opinion is for regular update and is not an official evaluation based on procedures in its committee. The agency has maintained the rating at Aa2, the third-highest, since December 2015.