Fitch Ratings on Thursday affirmed sovereign ratings of Korea at 'AA-' with a 'stable' outlook.
The action balances robust external finances and a strong macroeconomic performance with geopolitical risk related to the tense relationship with North Korea and longer-run challenges of rapid population ageing and low productivity.
Geopolitical risk resulting from the longstanding standoff on the Korean peninsula continues to weigh on the rating, the agency said. Nonetheless, affirmation of the ratings is in line with Fitch's belief that an outright war on the Korean peninsula will be averted.
Further, Fitch observed that macro performance continues to be strong compared with many of its peers. Fitch forecast GDP growth to be close to potential at 2.7 percent for 2017, 2.8 percent for 2018 and 2.6 percent for 2019.
Fitch also viewed that new administration's economic policy focus on job creation and income-led growth is likely to strengthen demand.
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