SEOUL, March 5 (Yonhap) - Moody's Investors Service Inc. predicts that the sovereign rating of Korea will remain stable and that the downside risks, as household debt and a weak yen, will remain under control.
Tom Byrne, Moody's senior vice president, presented a positive outlook for this year on the fourth largest economy in Asia, at a recent seminar held in New York, according to the report by the Center for International Finance South Korea.
Moody's upgraded the sovereign rating of South Korea at one level to "Aa3", in August last year, the of the table, citing strong fiscal fundamentals.
Byrne said the conditions of South Korean debt remain relatively optimistic compared to their counterparts, including China and Belgium, whose ratings are at a similar level to that of South Korea.
The first vice president said the government debt ratio in South Korea against its gross domestic product (GDP) stood at a steady level, on par with Australia and Sweden, according to the report.
Byrne said as possible risks the depreciation of the Japanese yen, U.S. decrease of spending costs, and public debt and households in South Korea, although they are manageable.
Notwithstanding he admitted that the decline of the yen could affect short-term Korean exporters, the impact will be limited in the long term, as the brand value of Samsung, Hyundai, and others, will offset those concerns.
The level of public debt in South Korea is the 12th highest among the 29 countries surveyed by Moody's, and the ratio of debt to GDP of 20 percent, a figure considered as stable, said Byrne.
As for the debts of the country's households, which reached a record 959.4 trillion won (879.3 billion dollars) in late December, its growth slowed considered as a positive sign, indicated it will not affect the sovereign rating, according to the report.
