SEOUL– Global credit rating company, Fitch, today affirmed South Korea’s sovereign credit rating at AA-minus with a stable outlook.

Fitch said that, South Korea’s rating balances the robust external finances, the resilient macroeconomic performance and the modest fiscal headroom against geopolitical risks and the medium-term structural challenges from an aging population.

It noted that the strong economic recovery, underpinned by the government’s effective management of the COVID-19 pandemic and a dynamic export sector, should continue to support the country’s credit rating in the near term.

South Korea’s real gross domestic product (GDP), adjusted for inflation, was expected by the rating company to rise 4.5 percent in 2021, following a 0.9 percent contraction in 2020.

A recent increase in the COVID-19 cases here poses downside risks to the expectations of a domestic consumption recovery in the second half, as social-distancing restrictions have been tightened to the highest level in Seoul, Fitch noted.

In the latest tally, South Korea reported 1,842 more cases of COVID-19 for the past 24 hours, lifting the total number of infections to 184,103.

It marked the highest daily caseload since the country’s first case was found in Jan last year. The daily caseload hovered above 1,000 for 16 straight days.

Fitch, however, said the vaccination rollout has accelerated since May, noting that the government appears likely to meet its target of vaccinating 70 percent of the population by Nov.

Along with additional fiscal support, under the recently proposed supplementary budget, the vaccination campaign should facilitate a sustained recovery in domestic consumption through 2022, the rating company said.

Source: NAM NEWS NETWORK