S&P keeps 'AA' rating on S. Korea despite virus woes

SEOUL, April 21 (Yonhap) -- Standard & Poor's (S&P) Global Ratings said Tuesday it will maintain its 'AA' long-term sovereign credit rating on South Korea due to the country's robust fundamentals.

The global ratings firm also kept the 'A-1+' short-term sovereign rating on Asia's fourth-biggest economy with a stable outlook.

"The COVID-19 outbreak will see the Korean economy contract for the first time since 1998, but we believe the sovereign's robust credit metrics can absorb this temporary shock," S&P said in a statement.

"The stable outlook reflects our expectation that Korea has the capacity to absorb the adverse effects of the COVID-19 pandemic and its economy will rebound in 2021," the global credit appraiser said.

This year, S&P predicted Korea's fiscal deficit to widen, due to stimulus measures, before returning to modest surpluses over the medium term.

"We would lower the ratings if we believe that geopolitical tensions related to North Korea will intensify to a point that they seriously affect Korea's economic, fiscal, or external performance," it said.

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