Fitch: Korea conflict could trigger eventual reunification – BBG

Stephen Schwartz, head of sovereign ratings for Asia Pacific at the US-based ratings agency, Fitch ratings, published a latest report on the North Korean risks and what it means for both North and South Korea.

Key Quotes via Bloomberg:

“South Korea’s sovereign credit rating “has explicitly factored in” a possible rise in the fiscal burden the government would face in the event of reunification.

“Nobody is talking about it today but it’s certainly one of the scenarios that could follow heightened tensions going forward,” 

“One fallout from a conflict could be eventual reunification.”

Though it’s “too early to be more precise,” he said reunification would involve “a significant fiscal shock to the South.” 

“Beyond the risk factors already incorporated in our rating is ‘event risk,’ meaning that if circumstances warranted it a rating review could take place.”

“But we do not currently expect this.”