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Biz News Korea(Eng)
S&P upgrades S. Korea’s sovereign credit rating to AA
- Collected
- 2016.08.09
- Distributed
- 2016.08.10
- Source
- Go Direct
The Ministry of Strategy and Finance announced on Monday that S&P raised Korea’s credit rating from AA- to AA with a stable outlook, the third-highest rating of the agency and the highest for the country. The AA rating is one notch higher than China’s AA-, two notches higher than Japan’s A+, and the same as the U.K. and France.
S&P, one of the three major international credit ratings agencies, upgraded Korea’s credit rating in 11 months since it raised it from a positive A+ to a stable AA- in September last year.
“Korea has exhibited stronger economic performance in recent years than most other high-income economies,” the agency said in a statement. “Our ratings on Korea reflect the country’s favorable policy environment, sound fiscal position and net external creditor position,” it added.
As for the stable outlook, the agency said that it could maintain Korea’s credit rating for the next two years unless geopolitical tensions on the Korean peninsula mount to a risky level.
The ministry said that S&P’s rating upgrade reflects the relative stability of the Korean economy while other major countries such as Australia, the U.K., Japan, Finland and China have all seen their sovereign ratings downgraded amid rising uncertainties in the global economy. The ministry added that the sovereign rating upgrade would lead to higher ratings for Korean financial firms and public companies, contributing to lower overseas borrowing costs and external risks.
By Cho Si-young
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