In this handout photo from the U.S. Navy, a strike force of Republic of Korea and U.S. warships patrol May 3, 2017 in the western Pacific Ocean, led by the Nimitz-class aircraft carrier USS Carl Vinson.
Such a scenario remains a “low-probability event,” Moody’s stated in a new report Wednesday following fresh bellicose rhetoric from North Korean leader Kim Jong Un and President Donald Trump. But should current tensions evolve to full-blown military action, the consequences could be immense.
The loss of human life is seen as the greatest repercussion from any major clash involving Washington, Seoul and Pyongyang, but the global economy will suffer as well, Moody’s said. The report did not discuss the worst-case scenario of the use of nuclear weapons, instead concentrating on credit quality for countries and industries at risk.
If the conflict lasts a few weeks, Moody’s warned of a hit to South Korean economic growth due to likely destruction of production capacity and infrastructure. But any slowdown would be temporary and offset by fiscal spending as well as Seoul’s external liquidity buffers, the report said.
Here are some of the biggest losers, according to Moody’s: