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BRIEF-Moody's says Moon Je-in being elected as Korean President clears uncertainty arising from political transition
May 10, 2017 / 1:49 AM / 2 months ago

BRIEF-Moody's says Moon Je-in being elected as Korean President clears uncertainty arising from political transition

2 Min Read

May 9 (Reuters) -

* Moody's views on Korea's Presidential election

* Election of Moon Jae-in as new Korean president clears uncertainty that may have arisen from the political transition

* Maintain our view that probability of military conflict with North Korea remains very low

* Geopolitical tensions continue to pose the most salient event risk for Korea and are a key constraint on the sovereign's credit profile

* Very strong government balance sheet provides fiscal space to support economy under potential negative shocks, though government debt would likely edge up

* Erosion of Korea’s fiscal strength could come from contingent liabilities from corporate restructuring or fiscal measures required

* Recent escalation in tensions between north korea and the us broadens the nature of geopolitical risk for korea

* Conclusion of the impeachment process in mid-march was credit positive

* Challenges faced are reforms in labor markets, public sector, social security; corporate restructuring, chaebol and addressing rise in household debt

* Probability of conflict on the peninsula is credit negative for Korea's government

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