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Moody's retains S. Korea's 'A1' credit rating
Writer : Sender
Jul 29, 2010
Moody's Investor Service maintained Wednesday its "A1" sovereign credit rating for South Korea and "stable" credit outlook, citing the country's robust economic recovery and resilience to fragility of developed economies.
"Asia's fourth-largest economy has shown very high strength due to its competitive export industries and relatively healthy corporate and banking sectors," Moody's said in its annual analysis report on South Korea.
"Even euro-zone debt concerns and slowing U.S. and Chinese economies have not impaired the country's fiscal and monetary normalization from crisis modes," the global credit rating agency added.
The latest assessment comes after Moody's upgraded in April South Korea's sovereign rating by one notch to A1, the fifth-highest investment grade.
Other countries in the same credit rating range as South Korea include China, Czech Republic, Portugal and Slovakia, the company said.
"There was no blowout of the fiscal deficit last year, unlike with many other highly-rated governments, and dent remains at a moderate level," said Tom Byrne, a Moody's senior vice president in the report.
South Korea's economy grew 7.2 percent on-year in the April-June period on robust exports and improved consumer spending, a result in line with market expectations.
However, geopolitical risks heightened by the March sinking of a South Korean warship blamed on North Korea are feared to set off uncertainties for a while although it isn't an immediate limit to the country's rating, the firm said.
"North Korea's sinking of a South Korean warship in March likely signals a period of heightened tensions ahead, while dynastic leadership transition and economic disintegration in the North add to the uncertainty," Byrne said.
"However the robust state of the Korea-US military alliance and China's interest in stability on the Peninsula will deter Pyongyang from taking even more reckless provocations, possibly leading to war," he noted.
South Korea accuses North Korea of attacking the 1,200-ton Cheonan with a torpedo near the disputed inter-Korean sea border on the Yellow Sea on March 26, killing 46 sailors. Pyongyang denies any involvement in the incident.
(Source: Yonhap News)
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