Impeachment does not affect South Korea's credit fundamentals: S&P

SINGAPORE - S&P Global Ratings said today that the impeachment of President Park Geun-hye does not have a material effect on the sovereign credit rating of South Korea, which is rated AA/Stable/A-1+. “Although political uncertainty could remain a distraction to policymakers for some time, we believe the effective Korean bureaucracy will keep the Government running smoothly,” S&P says.

South Korea’s constitutional court has up to 180 days to consider the impeachment motion, and once the court ratifies the vote, a Presidential election must be held within two months.

“We envisage potential delays in the passage of legislation as South Korea
enters this period of political uncertainty. However, we do not expect the
uncertainty to result in material changes to the sovereign's credit metrics,” the ratings agency says.

“This is partly because the National Assembly currently does not have
time-sensitive major Bills to consider.

“Should an emergency situation require rapid legislative responses, we expect the National Assembly to react adequately. It has a track record of passing key bills into law quickly despite deep divisions between the political parties.

“We anticipate that the mature institutions in South Korea will enable politics to revert to normal in due course. Any impact on domestic economic sentiments is likely to be temporary. www.standardandpoors.com (ATI).