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Moody's maintains S. Korea's credit rating at Aa2
According to Yonhap News,

(SEJONG=Yonhap News) Global rating agency Moody's Investors Service maintained its rating on South Korea at a record high of Aa2, with its rating outlook also remaining stable, despite domestic political issues, the finance ministry here said Tuesday.

Moody's said in its latest report that South Korea is expected to retain its economic growth over the long term with a higher per capita gross domestic product.

"Our assessment of Korea's economic strength is based on the economy's size diversity and competitiveness, which will help the country achieve reasonably robust medium-term growth, against the background of very high per capita income," said the agency.

"Challenges exist and are predominantly centered on the administration's ability to implement structural reforms against the background of a rapidly aging society and relatively high exposure to China's economic slowdown."

Fiscal and monetary policies of Asia's fourth-largest economy have successfully managed to keep relatively low inflation rates and contributed to stable economic growth.

The agency noted that the recent political turmoil regarding the impeachment of President Park Geun-hye and possible early presidential elections could be heavy drags on the South Korean economy.

"With executive power in transition, we consider it unlikely that major new policies will be implemented before the political crisis is resolved," it said. "Uncertainty about future political leadership and policy decisions could weigh on GDP growth as businesses postpone investment and hiring decisions, which would be credit negative."

In December in 2015, Moody's upgraded South Korea's credit rating to Aa2 from Aa3, the highest-ever rating the country has received from the agency.

Aa2 is the third-highest rating on the credit table, with only six other countries out of the Group of 20 advanced and developing nations currently with that rating.

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Source: Yonhap News (Feb. 21, 2017)

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