S&P affirms AA ratings for South Korea with stable outlook

A pedestrian walks by in Gwanghwamun Square, central Seoul, on April 6. (Yonhap)

S&P Global Ratings on Tuesday reaffirmed its AA long-term sovereign credit rating for South Korea, maintaining a stable outlook and citing expectations of resilient economic growth in the coming years.

The decision follows the New York-based credit agency’s prior affirmation of the rating in February.

“The stable rating outlook reflects our expectation that Korea will maintain average growth rates that are higher than most other high-income economies over the next three to five years at least,” the agency said in a statement, adding it anticipates modest fiscal deficits in the next three years or so.

S&P projected Korea’s gross domestic product to expand by about 2 percent annually through 2028, with GDP per capita rising from $35,000 in 2025 to $41,000 by 2028. For this year, the agency expects growth to slow to 1.2 percent due to persistent trade tensions, but sees a recovery to 2 percent in 2026 and a return to trend thereafter.

The agency also emphasized the strength of Korea’s institutional framework and policy environment as key pillars supporting the nation’s credit profile. It noted that the country’s recent political turbulence, stemming from the brief declaration of martial law in December 2024 and the subsequent impeachment of former President Yoon Suk Yeol, did not substantially derail economic stability.

However, it warned that prolonged political strife could erode policymaking capacity.

“Increased divisions could weaken future governments’ ability to rally popular support for policy changes that are necessary to shore up government finances and economic resilience as the population ages,” S&P said.