While the Korean economy contracted for the first time since 1998, growth is back on track, and the decline was less than that of most other high-income economies hit by COVID-19. We forecast Korea's fiscal deficit to widen this year but the general government balance should return to surplus by 2023. We affirmed our 'AA' long-term and 'A-1+' short-term sovereign credit ratings on Korea. The stable outlook reflects our expectation that the Korean economy will continue to exhibit stronger growth than most other high-income economies and that will help its fiscal repair process. The outlook is also predicated on our belief that geopolitical risks on the Korean peninsula will not escalate to the point of hurting Korea's economic fundamentals. On
