Choi Sang-mok: “All National Systems Operating Normally”
S&P, Moody’s, Fitch: “Sense of Resilience”
Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, held a video conference on the 12th with James Longsdon, Fitch Ratings global head of sovereign ratings, at the Government Complex in Jongno-gu, Seoul. [Provided by the Ministry of Economy and Finance]
Despite the martial law situation, the top three global credit rating agencies (Standard & Poor’s, Moody’s, and Fitch) have stated that South Korea’s sovereign credit rating remains stable. According to the Ministry of Economy and Finance on the 13th, Deputy Prime Minister Choi Sang-mok had video meetings with senior executives in charge of sovereign credit ratings from the three main agencies the previous day.
Although these agencies previously diagnosed that ongoing uncertainty from the martial law situation could be negative for South Korea’s national credit, they responded to Deputy Prime Minister Choi’s explanation that “all national systems in Korea are operating normally, as before,” by stating that “the Korean government’s efforts in active communication will be very beneficial for the credit ratings.”
Roberto Sifon-Arevalo, S&P’s global head of sovereign ratings, said, “The fact that Korea’s national systems have worked well despite recent events is of utmost importance to credit rating agencies. The rapid market stabilization actions taken by the Ministry of Economy and Finance, Bank of Korea, and other financial authorities right after the situation demonstrate how robust Korea’s economic system is.”
Marie Diron, Moody’s global head of sovereign ratings, mentioned, “We are closely monitoring Korea’s political situation,” but also highlighted that “the Korean government’s active communication efforts in these circumstances will be very beneficial for the credit ratings.” She added, “Considering the recent situation, I agree that there is no likelihood of downside risks to the Korean economy materializing,” noting that “Korea’s strong rule of law supports its high sovereign credit rating.”
James Longsdon, Fitch’s global head of sovereign ratings, also said, “Considering that there was no issue with Korea’s sovereign credit rating during the past presidential impeachment, this situation does not pose a threat to Korea’s credit rating either,” adding, “We highly appreciate the Korean government’s efforts to transparently explain this situation.”
Deputy Prime Minister Choi reassured the three credit rating agencies, stating, “During the two previous presidential impeachments, the economic impact was limited,” and that “foreign investors and others should face no problems in continuing stable investment and management activities.” He emphasized ongoing efforts to elevate the Korean economy, such as infrastructure expansion for semiconductors and artificial intelligence (AI), enhancing competitiveness in shipbuilding, aviation, and shipping, and support measures for the petrochemical industry.
As the state of impeachment continues to stir some confusion, the economic team is maintaining efforts to preserve external credibility and alleviate the spread of foreign investors’ concerns. On the morning of the 13th, Deputy Prime Minister Choi held a meeting with foreign-invested enterprises at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, urging them to “believe in the resilience and recovery potential of the Korean economy and proceed with scheduled investments and business activities as usual.” The previous day, he held a video meeting with Japanese Finance Minister Shunichi Suzuki, ensuring that “stable public order is being maintained and there are no concerns about the safety and normal economic activities of foreigners and companies in Korea, including Japanese nationals,” and explaining that “economic, financial, and foreign exchange authorities will closely monitor economic and financial trends and respond swiftly if necessary.”