World Economy

Fitch Cites Improvement in S. Korea Reforms

Fitch Cites Improvement in S. Korea Reforms Fitch Cites Improvement in S. Korea Reforms

The South Korean Finance Ministry said that global credit appraiser Fitch Ratings positively assessed the government’s structural reform efforts to improve its financial soundness.

Finance Minister and Deputy Prime Minister Yoo Il-ho met with Thomas Rookmaaker, Director in Fitch Ratings’ Asia-Pacific Sovereigns, in Seoul on Friday to discuss South Korea’s economic conditions and key economic policies, KBS reported.

Rookmaaker was said to have cited stable economic growth and solid fiscal soundness as the economy’s strengths and highly evaluated Seoul’s structural reform drive.

The Fitch director, however, also emphasized the need to keep a close eye on geopolitical risks related to North Korea.  

The ministry said that Yoo expressed gratitude to the agency for maintaining South Korea’s sovereign rating at AA- since September 2012 despite the global trend to mark down countries’ sovereign ratings.

  CCSI Rises

Confidence among South Korean consumers over economic situations rose to the highest in eight months after the country’s sovereign credit rating was upgraded by a US-based credit rating appraiser, central bank data showed on Friday, Xinhua reported.

Composite consumer sentiment index stood at 102 for August, up 1 point from the previous month, according to the Bank of Korea. The reading above 100 means optimists outnumbered pessimists.

It marked the highest since December last year, rising for two straight months as Standard & Poor’s revised up South Korea’s sovereign rating by one notch on Aug. 8 to AA. It was the highest the country ever received from the rating agency.

Local shares gained ground, and the government unveiled a supplementary budget plan for the second half of this year, helping boost outlook among consumers for economic conditions.

Sub-indices showed a rosy picture. The index on current economic conditions gained 3 points in August from a month earlier, with the reading for prospective economic situations advancing 5 points.

Readings for prospective household income and expenditure was unchanged at 100 and 106 each compared with the previous month.

Inflation expectations, which measure consumers’ outlook for headline inflation in the next 12 months, made no change at 2.4% for the fourth consecutive month.

Meanwhile, IBM has revealed its newest data center, situated in Pangyo, a purpose-built tech city located about 40 miles outside South Korea’s capital, Seoul.

The data center was developed alongside SK Holdings C&C and aims to help increase cloud adoption in the country as more businesses and consumers begin to build and use cloud-based applications.