Japanese credit rating agency R&I has upgraded South Korea’s sovereign credit rating. 

According to Seoul's Ministry of Economy and Finance, the firm raised South Korea’s credit rating by a notch from A+ to AA-. 

It is the first time in 12 years the agency has rated South Korea, during which time it maintained the “stable” outlook. 

R&I cited the country's solid economic growth, fiscal soundness and eased tensions on the Korean Peninsula as some of the reasons for the uptick.

It predicted the South Korean economy will log an annual growth in the upper two percent range this year with its slowing investment offset by increasing consumption.