Standard & Poor's on Friday raised South Korea's credit ratings, citing its less negative assessment of the geopolitical risks on the Korean peninsula.
The foreign- and local-currency long-term credit ratings on the Republic of Korea was lifted to A+/AA- from A/A+ with a 'stable' outlook. The agency also upgraded the local-currency short term rating to A-1+ from A-1 and affirmed its foreign-currency short-term ratings at A-1.
"The upgrade reflects our less negative assessment of the geopolitical risks on the Korean peninsula. It follows what we judge to be a smooth change of leadership in the Democratic People's Republic of Korea," the agency said in a statement.
S&P forecasts South Korea's economic indicators to be relatively weak in the next one to two years, reflecting the global economic slowdown and domestic measures to slow the growth of private sector leverage. The agency predicts real GDP growth to average 2.8 percent in 2012-2013, below the ling-term average of 3.5 percent.
S&P's rating action follows a similar move from Fitch Ratings on September 6. Fitch upgraded the sovereign's long-term foreign-currency rating to 'AA-' from 'A+', reflecting the country's continued economic and financial stability in the volatile global environment.
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