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S. Korean economy to grow 4.3 pct next year: S&P
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Standard & Poor's said Monday that the South Korean economy is forecast to
expand 4.3 percent next year despite the ongoing global uncertainties stemming
from the eurozone and the United States.
The global rating agency also said Asia's fourth-largest economy will likely grow 4.3 percent this year. The growth rate of the global economy is expected to accelerate to 3.5 percent next year from this year's 3.1 percent, with the Asia-Pacific economy, excluding Japan, predicted to grow 6.9 percent in 2012, it said.
"We basically expect solid growth in the Asia-Pacific region, excluding Japan. But it is difficult to rule out the uncertainties the recent slowdown in the eurozone and U.S. may pose to the South Korean economy," Kwon Jae-min, lead analytical manager for S&P's Asia-Pacific Corporate Ratings, said in a seminar in Seoul.
Kwon said South Korean companies are likely to keep their stable corporate ratings thanks to the region's solid economic growth.
"Of the 40 companies S&P tracks, the credit ratings of only two firms have been downgraded, which reflect the stable outlook we have for the local corporate sector," Kwon said.
Earlier this month, S&P downgraded LG Electronics Inc.'s long-term corporate credit rating to BBB- from BBB. It also cut its long-term corporate credit rating for POSCO Engineering & Construction Co. to BBB from BBB+.
By sector, Kwon offered a positive outlook on the auto industry, citing the rapidly-growing global market share of automakers such as Hyundai Motor Co. and Kia Motors Corp.
The credit outlooks for energy companies, telecommunications firms and state-run companies are also quite stable, he said.
However, the official presented a negative outlook on steelmakers and technology firms, citing a decline in profit margins stemming from the global economic downturn.
"Steelmakers face a continuous rise in raw material costs as well as falling global demand. High-tech firms are also undergoing weakening demand as well as a fall in product prices due to new competitors from China," Kwon said.
Meanwhile, S&P said South Korea's sovereign debt rating may fall to the BBB level at the most if the two Koreas are reunified due to a possible increase in political uncertainties.
S&P currently maintains its sovereign credit ratings on South Korea at A, the sixth-highest level. Its long-term rating outlook remained "stable."
South Korean policymakers and S&P officials are holding an annual meeting this week to assess the nation's overall economic situation and credit status.
Date
2011.10.17
The global rating agency also said Asia's fourth-largest economy will likely grow 4.3 percent this year. The growth rate of the global economy is expected to accelerate to 3.5 percent next year from this year's 3.1 percent, with the Asia-Pacific economy, excluding Japan, predicted to grow 6.9 percent in 2012, it said.
"We basically expect solid growth in the Asia-Pacific region, excluding Japan. But it is difficult to rule out the uncertainties the recent slowdown in the eurozone and U.S. may pose to the South Korean economy," Kwon Jae-min, lead analytical manager for S&P's Asia-Pacific Corporate Ratings, said in a seminar in Seoul.
Kwon said South Korean companies are likely to keep their stable corporate ratings thanks to the region's solid economic growth.
"Of the 40 companies S&P tracks, the credit ratings of only two firms have been downgraded, which reflect the stable outlook we have for the local corporate sector," Kwon said.
Earlier this month, S&P downgraded LG Electronics Inc.'s long-term corporate credit rating to BBB- from BBB. It also cut its long-term corporate credit rating for POSCO Engineering & Construction Co. to BBB from BBB+.
By sector, Kwon offered a positive outlook on the auto industry, citing the rapidly-growing global market share of automakers such as Hyundai Motor Co. and Kia Motors Corp.
The credit outlooks for energy companies, telecommunications firms and state-run companies are also quite stable, he said.
However, the official presented a negative outlook on steelmakers and technology firms, citing a decline in profit margins stemming from the global economic downturn.
"Steelmakers face a continuous rise in raw material costs as well as falling global demand. High-tech firms are also undergoing weakening demand as well as a fall in product prices due to new competitors from China," Kwon said.
Meanwhile, S&P said South Korea's sovereign debt rating may fall to the BBB level at the most if the two Koreas are reunified due to a possible increase in political uncertainties.
S&P currently maintains its sovereign credit ratings on South Korea at A, the sixth-highest level. Its long-term rating outlook remained "stable."
South Korean policymakers and S&P officials are holding an annual meeting this week to assess the nation's overall economic situation and credit status.
Source: Yonhap News (Oct. 18, 2011)