November 20, 2019 13:05
Global credit ratings firm Moody's has hinted it could downgrade the credit ratings of many Korean businesses next year.
The rationale is that export-dependent Korean companies are exposed to a raft of external uncertainties, including the U.S.-China trade war. Moody's also forecast Korea's economic growth rate in 2020 at 2.1 percent, virtually unchanged from this year's outlook.
Chris Park of Moody's Corporate Finance Group in Hong Kong told reporters in Seoul on Tuesday that the credit rating outlooks of 14 out of 24 Korean companies under evaluation were "negative."
"There is a chance for improvement in 2020, but we believe the rate of improvement will likely be limited."
Christian de Guzman at Moody's Sovereign Risk Group said Korea's economy is expected to grow 2.1 percent in 2020, up only 0.1 percentage points from this year. He explained that the Korean economy "has a relatively high susceptibility to event risks, mostly geopolitical ones," such as the protests in Hong Kong.
Regarding the government's fiscal soundness, de Guzman said achieving economic recovery goals will have a bigger effect on its credit rating than a rise in sovereign debt.
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