Summary: Korea (Republic of)

Our sovereign credit ratings on Korea reflect the country's favorable policy environment, sound fiscal position, and net external creditor position. Significant security risks and contingent fiscal liabilities partly offset these strengths. Korea has exhibited stronger economic performance in recent years than most other high-income economies (see "Sovereign Risk Indicators 2016 Estimates"). S&P Global Ratings projects Korea's average GDP per capita to rise above US$30,000 in 2019, from approximately US$27,000 in 2016. We estimate the trend rate of real per capita GDP growth at 2.6%, higher than the typical 0.3%-1.5% range we observe in most high-income countries. Although the Korean won's real effective exchange rate has appreciated by almost 30% since 2009, suggesting per capita wealth could be overstated in dollar

...Our sovereign credit ratings on Korea reflect the country's favorable policy environment, sound fiscal position, and net external creditor position. Significant security risks and contingent fiscal liabilities partly offset these strengths. Korea has exhibited stronger economic performance in recent years than most other high-income economies (see "Sovereign Risk Indicators 2016 Estimates"). S&P Global Ratings projects Korea's average GDP per capita to rise above US$30,000 in 2019, from approximately US$27,000 in 2016. We estimate the trend rate of real per capita GDP growth at 2.6%, higher than the typical 0.3%-1.5% range we observe in most high-income countries. Although the Korean won's real effective exchange rate has appreciated by almost 30% since 2009, suggesting per capita wealth could be overstated in dollar terms, the strong currency has not hurt the competitiveness of Korean exports. We believe this reflects the advancement of its tradable sector up the value-added chain. The...

Summary