Seoul Metropolitan Government

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations Supportive institutional framework Stable budget surplus post the pandemic Strong revenue base supported by a robust and diversified local economy Seoul Vision 2030 may spur additional spending Prudent financial management indicated by a long record of strong financial profiles Large liquidity buffer Sovereign rating of Korea constrains the ratings This will likely be driven by a solid recovery in consumption as social distancing measures are lifted. This will in turn help boost Seoul Metropolitan Government's (SMG) revenue. This is despite growing spending needs to improve welfare and education, and execute plans under Seoul Vision 2030. At the same time, we expect SMG to keep debt

...We expect Seoul's local economy to maintain robust growth. This will likely be driven by a solid recovery in consumption as social distancing measures are lifted. This will in turn help boost Seoul Metropolitan Government's (SMG) revenue. In our view, SMG's prudent financial management and the strong institutional framework governing Korea's local government sector will help SMG to sustain its solid fiscal performance. This is despite growing spending needs to improve welfare and education, and execute plans under Seoul Vision 2030. At the same time, we expect SMG to keep debt levels low and maintain robust liquidity balances. This is based on our updated base-case scenario for SMG and our extension of the forecast horizon through 2024. The sovereign rating on Korea (##/Stable/A-1+) will continue to cap the rating on SMG. Although SMG has a stand-alone credit profile (SACP) higher than the sovereign rating, we do not believe the metropolitan government could maintain stronger credit characteristics...

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