FITCH’S SOVEREIGN RATING FOR KOREA
Korea’s Sovereign Rating at “AA-”
Fitch reaffirmed Korea’s sovereign rating at AA- with a stable outlook stating that “Korea’s rating balances robust external finances, resilient macroeconomic performance and modest fiscal headroom against geopolitical risks related to North Korea and medium-term structural challenges from an ageing population.” Fitch also analyzed that “Korea’s strong economic recovery, underpinned by the government’s effective management of the COVID-19 pandemic and a dynamic export sector, should continue to support Korea’s credit metrics in the near term.”
Fitch forecast Korea’s real GDP to grow by 4.5 percent in 2021 and 3.0 percent in 2022 thanks to additional fiscal support under the recently proposed supplementary budget as well as a boost in exports and investment.
Korea to work on productivity growth
Fitch maintaining Korea’s rating at AA- reaffirms that Korea’s strong fundamentals and resilient recovery are highly evaluated. With Fitch reaffirming Korea’s rating at AA-, currently all three major credit rating agencies have kept Korea’s sovereign rating at record high levels with stable outlook reflecting the fast and strong recovery.
The Korean government will continue to make sure that Korea’s innovative strategies such as the Korean New Deal 2.0 will boost potential productivity growth.
Rating Action Commentary:
Please refer to the attached pdf