Dagong Global Credit Rating Co., Ltd., a Chinese credit rating agency, on Tuesday announced that it will maintain its local and foreign currency sovereign credit ratings for Italy at BBB and those for the Republic of Korea (ROK) at AA-.

Facing fiscal tightening and an adverse external environment, economic recession will continue in Italy, which is likely to see its economy contract by 2.6 percent in 2012 and 1.6 percent in 2013, said Dagong.

Dagong said it has maintained a negative outlook for Italy's local and foreign currency sovereign credit ratings in the next one to two years based on its ongoing economic recession, fragile market condition and large government debt.

Dagong said it sees a downward trend in the ROK's economic development in the short-term due to sluggish external demand, although the country still enjoys sufficient growth potential in the medium- and long-term for its strong competitiveness in the global market.

Dagong said it expects the ROK's economy to grow by 2 percent year-on-year in 2012 and 2.9 percent in 2013.

Dagong said the ROK's future financial risks will be related to property lending, as the asset quality of mutual savings banks and non-banking financial institutions that conduct mortgage-related business exhibits a downward trend.

Considering that the external vulnerabilities of the ROK's financial system is improving, which will reduce the government's contingent liabilities, Dagong maintained a stable outlook for the country's local and foreign currency sovereign credit ratings in the next one to two years. Endi

Go to Forum >>0 Comment(s)