Published : 2014-08-19 20:57
Updated : 2014-08-19 20:57
Global credit appraiser Fitch Ratings said Tuesday that it has affirmed its sovereign ratings on South Korea, citing its "resilient" growth, "moderate" government debt, and "sustained" budget surpluses.
Fitch retained its ratings on South Korea at "AA-," the fourth-highest of its rating system, and also maintained its rating outlook at "stable."
"Growth remains broadly resilient notwithstanding a slowdown in the second quarter of 2014 following a shock to consumer confidence from the Sewol ferry disaster," it said. "Moderate government debt and sustained budget surpluses support the ratings."
The credit agency also said that the country's external finances continue to "strengthen" thanks to its current account surplus.
It, however, cited "relatively high and rising household indebtedness" as a factor that could weaken the country's sovereign credit profile. Geopolitical risk associated with North Korea was also mentioned as a weak point.
A reduction in government and public-sector debt and a narrowing income gap could lead to an upgrade in the rating going forward, Fitch said. (Yonhap)