“Over the longer run, a persistent rise in public debt could pose greater risks for the rating, amid higher government spending pressures associated with an ageing population,” Jeremy Zook, director of sovereigns at Fitch Ratings, wrote in a note Monday. Otherwise, Fitch’s sovereign rating for Korea could drop from its current “AA-” on rising public debt. The aging population, coupled with a declining fertility rate of fewer than one child per woman, could leave Korea exposed to higher risks as rising government spending could become a less effective means of boosting nationwide productivity.įitch urged Korea to carry out midterm measures to keep the nation’s fiscal health intact. The fast-paced aging of South Korea’s population is likely to undermine the fiscal health of Asia’s fourth-largest economy in the long run amid soaring debt, credit ratings agency Fitch Ratings said Monday.
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