'Credit Indices Sound Enough to Absorb Temporary Shocks'
International credit rating agency S&P Global Ratings announced on April 21 that it maintained its long-term and short-term credit ratings for South Korea at "AA" and "A-1+," respectively. In addition, the credit rating agency maintained its credit rating outlook for South Korea at "Stable."
“The South Korean economy is likely to show the first negative growth since 1998 in the wake of COVID-19,” S&P explained, adding, “However, its credit indices are sound enough to absorb temporary economic shocks.”
According to S&P, South Korea’s GDP is estimated to fall 1.5 percent this year. For reference, its estimate provided last month was negative 0.6 percent. Still, the agency mentioned that the annual GDP growth of South Korea would reach 5 percent or so in 2021 based on economic stimulus measures and a rapid recovery in consumption.
“Geopolitical risks in the Korean Peninsula are unlikely to affect the fundamentals of the South Korean economy in a couple of years to come,” the agency went on to say, adding that the credit rating of South Korea might be lowered if the risks escalated to the point of affecting South Korea’s economic, fiscal and external indices.