Moody’s Raises Korea’s Sovereign Rating to A1

Moody's Investors Service, one of the three major global credit ratings agencies, upgraded its ratings for South Korea by one notch to "A1" from "A2" Wednesday, citing the country's faster-than-expected recovery from the worldwide economic slump, and the government's aggressive and timely fiscal stimulus.

Improving fiscal soundness and financial market fundamentals also made Moody's the first major global ratings agency to restore Korea's sovereign rating back to its pre-currency crisis level of 12 years ago.

"The change has been prompted by Korea's demonstration of an exceptional level of economic resilience to the global crisis, while containing the government's budget deficit. The resiliency of Korea's economy was evident in its ability to withstand relatively well the contradictory forces which emanated from the global recession," Moody's Senior Vice President Thomas Byrne said in a statement issued from Singapore.

Byrne said Korea's open economy expanded 0.2 percent in 2009 from the previous year, and was likely to stage a robust recovery with a 5-percent growth rate in 2010, despite the waning fiscal stimulus.

"Additionally, the global financial crisis has not resulted in a large increase in central government debt, which remains at a moderate level, while the fiscal deficit in 2009 was relatively small. Such achievements place Korea in a favorable position when compared with most other A-rated countries," he said.

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Moody’s Raises Korea’s Sovereign Rating to A1

by Lee Hyo-sik (leehs@koreatimes.co.kr)

http://www.koreatimes.co.kr/www/news/biz/2010/04/123_64222.html

FYI: Moody's Investors Service performs financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. The company has a 40% share in the world credit rating market, as does its main rival, Standard & Poor's.