Fitch Ratings said on the 30th that it kept Korea's sovereign credit rating at "AA-" with a "stable" outlook. "AA-" is the fourth-highest level in Fitch's rating scale. Among major advanced economies, it is the same as the United Kingdom, Belgium and Taiwan.
Fitch announced Korea's sovereign credit rating and outlook on this day. It is the first announcement this year among the three major global credit rating agencies, including S&P and Moody's. Fitch said it "assessed Korea's strong external finances, dynamic export institutional sector, and stable macroeconomic performance." However, it said that "structural issues stemming from population aging and rising government liability could weaken creditworthiness in the medium to long term."
Fitch projected Korea's economic growth at 1.0% last year and 2.0% this year. The 2.0% is the same as the government's forecast and higher than the Bank of Korea (1.8%) and the International Monetary Fund (IMF, 1.9%). Fitch said, "Supported by improving consumer sentiment and the Bank of Korea's base rate cuts, private consumption will increase and semiconductor exports will rise, leading to a recovery in growth."
Fitch also said political uncertainty has eased since the launch of the Lee Jae-myung administration. On the won-dollar exchange rate trend, it added, "The won came under depreciation pressure last year due to capital outflows from Koreans' increased investment in U.S. stocks, but the won will appreciate somewhat this year and next."
By contrast, it said risks to Korea's economy remain, including reciprocal tariff impositions by the United States and a slowdown in exports to China. It also said that continued increases in government liability due to expansionary fiscal policy could weigh on the credit rating. Fitch expected government liability to rise to 50.6% of GDP in 2026. As of the end of 2024, it was 49.7%.
Meanwhile, reflecting a decline in the working-age population, Fitch lowered its estimate of Korea's potential growth rate to 1.9% from 2.1%.