Global credit appraiser S&P maintains sovereign ratings, outlooks for S Korea

15:10, January 13, 2010      

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Standard and Poors (S&P), an international credit appraiser, has affirmed its 'A/A-1' foreign-currency and 'A+/A-1' local-currency sovereign credit ratings on South Korea, while keeping the outlook 'stable,' the finance ministry said Wednesday.

According to the Ministry of Strategy and Finance, Kim Eng Tan, an analyst of S&P, announced that the credit ratings on South Korea are supported by the nation's dynamic economy, sound fiscal position, and a projected modest net external debtor position.

S&P has been keeping the sovereign ratings and outlooks for South Korea at the current level since July of 2005, the ministry added.

"The sovereign credit ratings on (South) Korea are supported by the nation's dynamic economy, sound fiscal position, and a sizeable holding of foreign exchange reserves," the ministry said, citing a press release by the credit rating agency.

The agency, on the other hand, listed uncertain costs of reunification and the banking sector's significant short-term external borrowing as fundamental weaknesses of the economy, according to the ministry.

So as to maintaining the stable outlook on the ratings on South Korea, S&P said it reflected expectations that the general government account will return to a sustainable balance within the next two years.

S&P hinted that it may revise the ratings upward if fiscal improvements are substantially better than current projections and future developments lead to significantly smaller estimates of contingent liabilities for the government, the ministry said.

The data came after the South Korean government in late 2009 revised up its growth outlook the 2010 economy to a 5 percent growth.

S&P, meanwhile, said that South Korea is likely to register average per capita real GDP of 2.2 percent in 2009-2011, the ministry said.

Source: Xinhua
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