September 14, 2017 / 6:36 AM / a year ago

S&P says could consider raising South Korea rating if North Korea stops provocative actions

SEOUL (Reuters) - Credit rating agency Standard & Poor’s said on Thursday that it could consider raising South Korea’s sovereign credit rating if North Korea is sincere about stopping its provocative acts.

A man watches TV news report about North Korea's nuclear test at an electronic shop in Seoul, South Korea on September 3, 2017. Han Jong-Chan/Yonhap/via REUTERS

“Yes. If we can credibly believe that they (North Korea) will stop provocative acts in future, and hopefully meaning that they will normalize their economy to some extent,” Kim Eng Tan, senior director at S&P’s sovereign ratings team told reporters in Seoul.

Tan was responding to a question on whether a surprise ratings upgrade for South Korea is possible.

However, it is an unlikely scenario given the heightened tensions in the Korean peninsula, he said.

“I don’t think anyone can stop them from developing their weapons further,” Tan said.

S&P has South Korea on its third highest rating of AA with a stable outlook, on par with the UK and Belgium.

Commenting on the boycott of South Korean companies by China, Tan played down the economic impact, saying the retaliatory actions won’t be excessive, and punishment against Seoul’s decision to deploy a U.S. missile shield system, or the Terminal High Altitude Area Defense (THAAD), will largely be symbolic.

Reporting by Cynthia Kim & Dahee Kim; Editing by Shri Navaratnam

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