Korea rated relatively stable: COFACE

A leading French risk analysis agency evaluated Korea as a nation with stable political and economic environments and a low possibility of defaulting on foreign debts.

In a country-risk analysis unveiled Jan. 31, the French Assurance Company of External Commerce (COFACE) said that Korea is a relatively stable country and ranked it in the second grade (A2) out of seven along with Singapore and Italy.

COFACE also said that Korea had remained below 50 out of the world average of 100 on the debt default index since last June.

As Korea¡¯s strong points, the French agency cited the nation¡¯s enthusiasm for education, high savings rate, good quality manufacturing facilities and its government¡¯s strong will to push reforms, especially of the financial sector.

But it suggested as weak points the high debt ratio of conglomerates or Chaebol, an inefficient financial system highly dependent on Chaebol and low credit ratings, and the expected high cost of national reunification.

In the survey, the United States, Japan, France and Hong Kong were grouped in the first grade (A1), while China and Russia were categorized in the third grade (A3) and sixth grade (C), respectively.

Kim Se-Won claire@donga.com