S&P Maintains South Korea's Sovereign Credit Rating at 'AA' with a 'Stable' Outlook

[Image source=Yonhap News]

[Asia Economy Reporter Donghyun Choi] International credit rating agency Standard & Poor's (S&P) announced on the 28th that it has decided to maintain South Korea's long-term sovereign credit rating at the previous rating of 'AA.'

The rating outlook was also maintained as 'stable,' the same as before. The short-term sovereign credit rating was also maintained at the previous 'A-1+'.

In its report, S&P evaluated, "Last year, the South Korean economy recorded negative growth for the first time since 1998 due to the impact of COVID-19, but it quickly returned to a growth trend, showing a better performance compared to most high-income countries."

S&P further diagnosed, "The likelihood that South Korea's solid growth momentum will be significantly damaged by COVID-19 is low." It also forecasted, "Although South Korea's fiscal deficit will expand this year, it is expected to return to a surplus by 2023."

S&P predicted that the South Korean economy is likely to record an average annual real GDP growth rate per capita close to 3% during 2021?2024. It estimated that South Korea's per capita GDP will rise from below $36,000 to above $42,000 during the same period.

The economic growth forecast for South Korea this year was presented as 3.6%, and the forecast for next year was 3.1%.

S&P has maintained South Korea's sovereign credit rating at 'AA' since it raised it one notch from 'AA-' in August 2016.

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