S&P maintains South Korea's sovereign credit rating at 'AA'

On the 30th, the international rating agency Standard & Poor's (S&P) maintained South Korea's long-term sovereign credit rating at the current "AA" level. The short-term government bond rating also remained unchanged at "A-1+".
It is the first time in about two years since April 2022 that S&P has announced South Korea's credit rating.
"We will maintain the country's long-term and short-term foreign currency and won currency sovereign credit ratings," it said.
S&P expects South Korea's economy to grow 2.2 percent this year and to approach or exceed 2 percent annually for the next three years. It also forecasts that South Korea's per capita growth rate will reach 1.2 percent this year.
Gross domestic product (GDP) is expected to reach about $35,000, while inflation is expected to slow to 2.6% this year from 3.6% last year.
The government's fiscal health is expected to improve from next year, with the goal of achieving a balanced budget in 2027.
The government's general fiscal balance as a percentage of GDP is expected to be minus 1%. Regarding geopolitical risks, the government is expected to be vulnerable to the risk of contingent liabilities associated with the "cost of unification" in the event of the collapse of the North Korean regime.
While pointing out the risk of the crisis, S&P said it did not believe the risks were high enough to damage the country's economic foundations. "Geopolitical risks continue to pose a burden on South Korea's sovereign credit rating," the report said.
However, the recent situation in North Korea has not yet escalated into a serious security or economic risk on the Korean Peninsula.
"We once again expressed our trust in the Korean economy," he said, adding, "We particularly value the strong growth prospects for the Korean economy and its solid external health."
Deputy Prime Minister for Economic Affairs Choi Sang-mok met with Roberto Sifon Arevalo, global head of national credit ratings at S&P, in DC.
"We will maintain close communication with the government and proactively explain the economic situation and policy direction of Korea," he said.