S.Korea's sovereign credit risk hits 13-year low on strong resilience: vice minister

2021-05-06 09:06:04 GMT2021-05-06 17:06:04(Beijing Time) Xinhua English

SEOUL, May 6 (Xinhua) -- South Korea's sovereign credit risk hit a 13-year low, indicating strong economic resilience from economic downturn caused by the COVID-19 pandemic, a government official said Thursday.

"(South) Korea's sovereign credit risk fell to the lowest since 2008, reflecting the recent economic performance and the economy's strong resilience," Lee Eog-weon, vice minister of finance, told foreign correspondents in Seoul.

Premium on credit default swap (CDS), which gauges credit risk on the five-year government bond of South Korea, declined to 19 basis points in New York overnight.

It was the lowest since the global financial crisis affected the economy in 2008. The record-low reading was tallied at 14 basis points in April 2007, but it was of no significance given the shortage of CDS transactions at the time, the ministry noted.

Lee said South Korea's sovereign credit risk has been on the decline since April, noting that it reflected how foreign investors see the Asian economy.

South Korea's seasonally-adjusted real gross domestic product (GDP) grew 1.6 percent in the January-March quarter from the previous quarter.

It far exceeded the growth expectations of about 1 percent by international organizations and investment banks, restoring the pre-pandemic level.

Export, which accounts for about half of South Korean economy, surged 41.1 percent in April from a year earlier, showing optimistic signs of economic recovery in the second quarter.

"It will be significant to achieve a complete economic recovery this year through a strong, sustainable and inclusive recovery," the vice finance minister said, adding that managing the pandemic situation will be key to achieving the goal. Enditem