Moody’s upgrades South Korean bond ratings to Aa2

SEOUL - Moody’s Investors Service has upgraded South Korea’s issuer and bond ratings by one notch to Aa2, from Aa3, the highest rating so far achieved. Aa2 is the third-highest of Moody’s 21 rating levels, with only seven G20 member States - South Korea, the US, Germany, Canada, Australia, the UK and France – on the list.

The upgrade comes eight months after Moody’s kept South Korea’s rating at Aa3 but raised its outlook from “stable” to “positive.”

Moody’s expects South Korea’s credit metrics to remain strong and resilient, and says its institutional strength will support continued implementation of the government’s structural reforms.

Moody’s outlook for South Korea over the next five years has it growing faster than other advanced economies. It expects the nation to continue to post fiscal surpluses of about 0.5% of GDP, with general Government debt to remain stable at around 40% of GDP.

Moody’s expects the Government’s structural reforms in four areas - public services, labor, finance and education - to succeed, further promoting economic growth and fiscal resilience. www.moodys.com (ATI).