Fitch to Visit Korea Tomorrow Over "Concerns About Government Debt," First Annual Review Under Lee Administration

Sovereign Credit Rating Report Expected in the First Half of Next Year

Fitch, one of the world’s top three credit rating agencies, is set to release its first sovereign credit rating report under the Lee Jaemyung administration, which has been pursuing expansionary fiscal policies.

On December 1, the Ministry of Economy and Finance announced that a Fitch annual review delegation will visit the South Korean government from December 2 to 4 to conduct its annual review for the credit rating assessment.

The delegation, including Jeremy Zook, Director of Asia-Pacific Sovereign Ratings, and Sagarika Chandra, Director of Asia-Pacific Sovereign Ratings, will visit various government ministries, the Bank of Korea, as well as research institutes such as the Korea Institute for International Economic Policy (KIEP) and the Korea Development Institute (KDI), along with major private sector organizations.

The delegation is also scheduled to hold an in-person meeting this week with Koo Yooncheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance.

The annual review is expected to focus on South Korea’s economic conditions and outlook, fiscal management direction, trade, and other key external economic issues.

The results of the credit rating assessment are expected to be released in the first half of next year.

Fitch, which tends to take a somewhat conservative stance on fiscal management, expressed concerns in its report released this February, shortly after the 12·3 Martial Law, stating that “if government debt continues to rise, it could put pressure on the credit rating.”

In that report, Fitch maintained South Korea’s sovereign credit rating and outlook at the existing level (AA-·Stable). ‘AA-’ is the fourth highest rating in Fitch’s system, following AAA, AA+, and Aa2, and is one notch below the ratings assigned by other agencies such as S&P (AA) and Moody’s (Aa2).

Fitch issues an official opinion on South Korea’s credit rating once a year. In September 2012, Fitch upgraded South Korea’s sovereign credit rating from ‘A+’ to ‘AA-’ and has maintained this rating for 14 consecutive years.

This content was produced with the assistance of AI translation services.