Moody's Maintains South Korea's Credit Rating at Aa2... "Credit Rating Stable"

[Asia Economy Reporter Jang Sehee] The international credit rating agency Moody's has maintained South Korea's current credit rating at Aa2 with a stable outlook. It evaluated that South Korea possesses effective management capabilities to handle the economic shock caused by the novel coronavirus disease (COVID-19) pandemic.

On the 12th, Moody's stated in a press release, "As demonstrated during the COVID-19 crisis, South Korea has strong governance and effective macroeconomic, fiscal, and monetary management capabilities to respond to shocks."

Furthermore, it explained, "South Korea is expected to maintain relatively robust growth potential and strong fiscal and debt indicators compared to countries with similar ratings."

Moody's forecasted that the economic damage to South Korea caused by COVID-19 will be limited, and the government's fiscal and debt situation will not significantly deteriorate. However, from a long-term perspective, aging is expected to constrain growth and increase the government's debt burden.

In this regard, the Ministry of Economy and Finance stated, "Moody's recent decision is significant as it reconfirms South Korea's external creditworthiness despite the worsening domestic and international conditions such as economic slowdown due to COVID-19," and added, "The government plans to actively communicate with credit rating agencies through non-face-to-face means such as conference calls and closely manage the national credit rating going forward."

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