"Stable Korean Economy" Fitch Maintains Credit Rating (Update)

[Photo by Reuters] Reuters News Agency

International credit rating agency Fitch has maintained South Korea's sovereign credit rating at 'AA-'. Despite significant uncertainty due to the presidential impeachment crisis, the assessment is that South Korea's economic conditions have not deteriorated. This Fitch rating announcement is the first among major credit rating agencies since the December 3 emergency martial law incident last year.

On the 6th (local time), Fitch issued its evaluation opinion on South Korea's credit rating, maintaining both the rating and outlook at the previous levels of 'AA-' and 'Stable', respectively. 'AA-' is the fourth highest rating in Fitch's credit rating scale, following AAA, AA+, and Aa2. Compared to other rating agencies, it is one notch below S&P's (AA) and Moody's (Aa2) ratings.

South Korea's Fitch rating is the same as that of the United Kingdom, France, and Belgium, and two levels higher than Japan. Fitch upgraded South Korea's sovereign credit rating from 'A+' to 'AA-' in September 2012 and has maintained the same rating for 14 years.

This evaluation is the first official assessment by an international credit rating agency since the December 3 emergency martial law incident last year. Immediately after the martial law incident in December last year, Fitch stated, "Following the declaration and immediate withdrawal of martial law by the South Korean president, political risks are expected to persist for the next few months," and warned that "if the political crisis prolongs or political divisions undermine policy implementation, economic performance, or fiscal management, downward pressure could increase."

However, in the actual evaluation, Fitch maintained the rating and outlook. Fitch noted, "Although recent political uncertainty has sharply increased and is likely to continue for the next few months, it is not expected to materially impair South Korea's governance or economy."

According to the World Bank Governance Indicators (WBGI), which Fitch uses as a key criterion for sovereign credit assessments, South Korea scored 80.5, receiving a higher score compared to countries with the same rating.

Fitch issues an official evaluation opinion on South Korea's credit rating once a year. Last year, it also released an evaluation report in March.

This content was produced with the assistance of AI translation services.