Standard and Poors: South Korea Still Has Uncertain Economic Policy

The U.S.-based firm Standard and Poors, one of the world’s top international credit agencies, announced on July 22 that South Korea is one of the nations that still has uncertainty in terms of economic policies.

In its’ report, “August 2004 Report on the Asia-Pacific Region,” S&P pointed out that India, Taiwan, Sri Lanka, Philippines, and South Korea have completed national elections whereas their economic policies still remained unstable.

The agency analyzed that economic depression in the Asia-Pacific region has been recovering since mid-2003 and is continuing to dissipate. Most nations in the region have been seeing their levels of domestic demand and investment reviving, S&P reported.

S&P said that this might be caused by a sharp growth in exports due to the increased trading within the Asian region, especially China. However there are clouds over the future growth of the region, considering the recent trend worldwide and in the Asian region.

“The aggravating security status in the Middle East will keep oil price high and may affect inflation and poor trading,” Ping Chu, a credit analyst of S&P, diagnosed. “This explains why economic growth may slow down, and why tendencies are unlikely to be changed.”

“Early this year, we were concerned that national elections in every Asian country could lead to confusion of economy and financial matters,” he said. “Some unexpected results burst out in the cases of Taiwan and India. However, most were smooth transitions of democratization just like Indonesia.”

In the report, S&P evaluated the prospective outlook for the credit rating of five nations: China, Thailand, Pakistan, Indonesia, and Cook Island at the “positive” level. Japan and Hong Kong received upward ratings from “negative” to “stable.”

Yong Park parky@donga.com