“We believe the likelihood of an economic recovery in Japan strong enough to restore economic support for sovereign creditworthiness commensurate with our previous assessment has diminished”, S&P said in a statement.

In a Sept. 10 report, titled “Storm Alert: Natural Disasters Can Damage Sovereign Creditworthiness”, S&P said a sovereign’s credit standing would likely be hurt when “severe” natural disasters hit densely populated and economically developed areas.

“As a result, government debt would increase in the most affected sovereigns by between 6% (Dominican Republic) and 28% of GDP [gross domestic product] (Japan) by 2020, compared with the no-earthquake baseline scenario”.

The second reason was a relatively sound fiscal status.

“Korea has exhibited stronger economic performance in recent years than other high-income economies”, it said”.

That said, S&P is careful to emphasise the stable outlook on its long term rating for the country.

But it also warned: “We could lower the sovereign ratings on indications that the government debt burden could rise more significantly than we currently expect, potentially due to continuously weak economic growth and prices trends”.

The S&P has raised Korea’s credit rating to AA-.

At present, Korea’s credit ratings assigned by the world’s three-largest credit rating agencies are higher than ever, and the average is higher than that of China and Japan.

The latest upgrade places South Korea on the same levels as China, Taiwan and Japan on S&P’s rating scheme, although Japan has a negative long-term outlook.

“S&P’s diagnosis about the uncertain economic outlook means that prospects for fiscal consolidation are becoming uncertain”, said Toru Suehiro, senior market economist at Mizuho Securities. “This could be relevant for EU sovereign ratings in a future financial crisis”, he said, adding that, if mishandled, Europe’s approach to solving the refugee influx may lead to increased populism and xenophobia, diverting attention from budgetary and structural reforms.

“S&P in the past placed great importance on risks associated with North Korea, but this may have been alleviated by the recent bilateral agreement to ease tensions along the demilitarized zone”, the ministry said.

The overall direct cost appears to be fairly modest, S&P said, adding that it expects similarly modest extra public spending in other countries.