South Korea’s economy will not be highly affected by the situation in North Korea, global credit appraiser Moody’s Investors Service said Thursday, citing the South’s economic strength.
“The (South) Korean government’s A1 ratings and the country’s Aa2 foreign currency bond ceiling reflect Korea’s very high economic strength, high institutional strength, high government financial strength, but moderate, or mid-range, susceptibility to event risks, from North Korean military provocations or regime instability,” Moody’s said in an e-mail.
Since April 2010, Moody’s has retained South Korea’s A1 status, or the fifth-highest on its 21 rating scale. Aa2 is the third-highest rating.
The credit rating agency said the North Korea-related geopolitical event risk has been assessed at a moderate level, which would not necessarily hinder further upward movement in South Korea’s rating.
It noted: “War risk is primarily lowered by a robust South Korea-U.S. military alliance, which has ensured peace on the peninsula for more than five decades.
“China’s strategic interest in regional stability should also help to contain North Korean provocations.”