Credit Rating Agencies Reassure on Korea's Economic Stability

Deputy Prime Minister and Minister of Economy and Finance of Korea, Choi Sang-mok, recently held virtual meetings with senior officials from global credit rating agencies Fitch, Moody's, and S&P on December 12. The meetings, conducted at the Government Complex Seoul, aimed to prevent any potential downgrade in Korea's external credit ratings due to the political turmoil triggered by President Yoon Suk-Yeol's declaration of martial law.

During the meetings, Choi emphasized that all national systems of Korea, including the Constitution, market economy, and crisis management, are operating normally. He highlighted that despite two past impeachment incidents, their impact on the overall economy was limited. Choi also mentioned that the government plans to actively participate in the economic consultative body proposed by the opposition party.

Choi's efforts to reassure the credit rating agencies appear to have been successful. According to the Ministry of Economy and Finance, the three global credit rating agencies agreed that the Korean economy remains stable. Roberto Sifon-Arevalo, global head of sovereign ratings at S&P, stated, "The most important aspect for a credit rating agency is that Korea's national systems have functioned well despite the recent situation." He added, "The swift market stabilization measures taken by the Ministry of Economy and Finance and the Bank of Korea right after the incident demonstrate how robust Korea's economic system is."

Marie Diron, global head of sovereign ratings at Moody's, reaffirmed that "Korea's strong rule of law supports its high sovereign credit rating," and mentioned that "the government's proactive communication efforts will be very useful for credit evaluation." James Longsdon, global head of sovereign ratings at Fitch, also appreciated the government's efforts, stating, "We highly appreciate the government's efforts to transparently explain the situation."

The proactive communication efforts by Deputy Prime Minister Choi and the swift market stabilization measures taken by the Ministry of Economy and Finance and the Bank of Korea have demonstrated the robustness of Korea's economic system. As a result, the country's credit rating remains robust, and the Korean economy continues to be viewed as stable by global credit rating agencies.