Fitch Maintains South Korea's Credit Rating at 'AA-'... Growth Rate Forecasted at 1% This Year

[Image source=Reuters Yonhap News]

On the 17th, the Ministry of Economy and Finance announced that the international credit rating agency Fitch has maintained South Korea's sovereign credit rating at 'AA-'. The outlook for the sovereign credit rating was also kept 'Stable'.

Fitch upgraded South Korea's sovereign credit rating from 'A+' to 'AA-' in 2012 and has maintained the same rating since then.

It projected a growth rate of 1.0% for this year and 2.1% for next year. This is the same as the downwardly revised September forecast, compared to the March forecast of 1.2% and 2.7%.

In this evaluation, Fitch stated that "the growth momentum of the Korean economy is recovering, and thanks to the government's efforts to improve fiscal soundness, the fiscal deficit level will continue to decline."

It also cited "sound external stability," "macroeconomic resilience," and "dynamism in the export sector" as strengths of the Korean economy. It explained that "structural issues due to aging" and "geopolitical risks such as North Korea" were also reflected in the rating assessment process.

Fitch recently expressed support for the South Korean government's budget proposal for next year, calling it "a declaration of intent to maintain sound fiscal management."

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