S&P - Korea`s Credit Rating and Outlook Maintained

The U.S. credit ratings evaluation company, Standard & Poor`s (S&P), officially announced on May 26 that the current national credit rating and the credit rating outlook in Korea stands at `A-`, representing `stability`.

“It seems that it will need some time for the geopolitical tensions on the Korean Peninsula to be resolved. However, we have considered the outlook that the situation will somewhat lighten through negotiations and support granted to North Korea,” explained John Chamber, executive director of S&P as well as chairman of the National Credit Rating Analysis Committee. Nevertheless, he warned that “the possibility of the tense situation in the Korean Peninsula leading to military action is very rare but by any chance, if the concern becomes a reality, the national credit rating of Korea would drop by one or more grades.”

On a positive note, he added that the national credit rating of Korea could rather take an upward tendency if geopolitical tensions alleviate along with the reduced financial burden of unification.

For this evaluation, S&P sent an annual council group along with its executive director, John Chambers, as the head of the group to Korea at the end of last April to conduct actual inspections of the Ministry of Finance and Economy, the Ministry of National Defense and the Bank of Korea.

The Ministry of Finance and Economy forecasted that the credit rating and outlook analyzed by S&P will be maintained until the end of this year as long as nothing unusual occurs.

Kwang-Hyun Kim kkh@donga.com