September 16, 2015 09:53
Global credit rating firm Standard & Poor's on Tuesday raised Korea's sovereign rating one notch from A+ to AA-, citing the country's growth potential and a decline in external debt.
Korea now has the equivalent of AA- ratings from all three global rating firms -- Moody's, Fitch and S&P.
The only other countries with clean AA credit ratings from all three are Australia, Canada, France, Germany, Saudi Arabia, the U.K. and the U.S.
AA- is the fourth-highest rating in S&P's evaluation scheme and higher than the A+ rating Korea had been given in September 2012.
S&P gave three major reasons for raising the rating. The first was a continually robust economic growth trend. "Korea has exhibited stronger economic performance in recent years than other high-income economies," S&P said, while not being dependent on one particular export market.
It added that Korea's sluggish export performance is not as serious as for other advanced countries.
The second reason was a relatively sound fiscal status. S&P said Korea's fiscal debt load is sound compared to other advanced countries.
The third reason is Korea's low sovereign debt load. The firm said Korea is a net creditor nation or a country with a cumulative balance of payment surplus, and its trade surplus will continue.
S&P has been conservative in rating Korea due to the nuclear threat from Pyongyang. The government believes the dramatic resolution reached by the two Koreas in the recent military standoff played a huge part in swaying the firm.
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