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Moody's Lifts S. Korea's Rating Outlook

Moody's Investors Service on Monday lifted the outlook on the Republic of Korea's rating, citing strong fiscal fundamentals and resilience in external financing position.

The outlook on 'A1' government bond rating was revised to 'positive' from 'stable'. The agency said reduction in the banking sector's level of external vulnerability and the outlook for relatively strong trend GDP growth over the medium term also underpinned the upgrade.

Nonetheless, rising household debt is a concern. If unchecked, this trend could impair bank asset quality and introduce a drag on private consumption expenditure as an important source of GDP growth, the agency assessed.

Moody's last rating action on the Government of Korea was on April 14, 2010, when its government bond ratings were raised to 'A1' from 'A2'.

by RTT Staff Writer

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