Global credit rating agency Standard & Poor's (S&P) maintained South Korea's long-term sovereign credit rating at "AA" with a stable outlook despite the coronavirus outbreak.

S&P also kept the "A-1+" short-term sovereign rating for Asia's fourth-biggest economy.

S&P said in a statement on Tuesday that the South Korean economy is forecast to contract for the first time since 1998 due to the COVID-19 outbreak, but it will rebound in 2021.

Assessing the economic impact of the coronavirus on the Korean economy as a "temporary" shock, the credit rating agency said the country will see its gross domestic product expand around five percent next year on the back of stimulus measures and a sharp increase in consumption demand.

S&P projected that South Korea's fiscal deficit will widen this year due to stimulus measures, before returning to modest surpluses over the medium term.