<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published August 18, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>S&P affirms Singapore's ratings, outlook stable
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>
STANDARD & Poor's (S&P) Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings for Singapore, with the outlook remaining stable.
The ratings on Singapore are underpinned by the sovereign's enduring fiscal and external strengths, and its strong record of prudent macroeconomic management. At the same time, the ratings take into account the challenges the country faces as a small and open economy, it said.
It considered Singapore's general government surplus - consistently among the highest in the world - to have averaged 8 per cent of gross domestic product (GDP) between 2005 and 2008.
The level of surplus provides high fiscal flexibility, which is needed for structural reforms, such as the ongoing efforts to diversify the economy - making it less reliant on electronics exports - and to enhance cost competitiveness.
'The high fiscal flexibility also provides additional cushioning against potential economic and fiscal shocks,' said Standard & Poor's credit analyst Phua Yee Farn.
The city-state is facing its worst-ever recession in 2009, but the government's considerable external and fiscal reserves allowed it to unveil a bumper economic package in January worth $20.5 billion (8 per cent of GDP), focusing on job retention and freeing up credit.
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT><TABLE border=0 cellSpacing=0 cellPadding=4 width=300 align=right><TBODY><TR><TD vAlign=top align=middle>
<!-- AdSpace --><IFRAME height=250 marginHeight=0 src="http://ads.asia1.com.sg/html.ng/site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250" frameBorder=0 width=300 marginWidth=0 scrolling=no bordercolor="#000000"><script language='JavaScript1.1' src='http://ads.asia1.com.sg/js.ng/Params.richmedia=yes&site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250'></script><noscript>
</noscript></IFRAME><!-- /AdSpace-->
</TD></TR></TBODY></TABLE>The impact of the package has alleviated some of the effects of the current global recession, as recent indicators such as non-oil domestic exports, manufacturing data, and unemployment figures are pointing to signs of a recovery in the near term, Mr Phua said.
The ratings on Singapore are also supported by the country's political stability. The government has consistently embraced a pragmatic and forward- looking approach to policymaking, said S&P.
Given its small and open economy, however, Singapore is more exposed to exogenous shocks than some of its peers, it noted. Nevertheless, Singapore's history of recovery from past recessions is remarkable. GDP contraction of 1.4 per cent in the 1998 financial crisis was followed by swift return to growth of 7.2 per cent in 1999 and 10.1 per cent in 2000.
Although Singapore's export base has become more diversified since then, its economic performance remains vulnerable to global demand. Given the small size of its domestic market, it has no significant room to shift its focus to more domestic-oriented growth, unlike some of its neighbouring countries.
'This vulnerability is in part mitigated by the government's fiscal flexibility to deal with cyclical shocks and the continued efforts in structural reforms to ensure the economy remains competitive,' Mr Phua said.
Effective regulation, coupled with banks' ample liquidity, good capitalisation, and the bulk of their exposure being to the local market, has mitigated some of the effects from the global financial fallout. -- Reuters
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>S&P affirms Singapore's ratings, outlook stable
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>STANDARD & Poor's (S&P) Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings for Singapore, with the outlook remaining stable.
The ratings on Singapore are underpinned by the sovereign's enduring fiscal and external strengths, and its strong record of prudent macroeconomic management. At the same time, the ratings take into account the challenges the country faces as a small and open economy, it said.
It considered Singapore's general government surplus - consistently among the highest in the world - to have averaged 8 per cent of gross domestic product (GDP) between 2005 and 2008.
The level of surplus provides high fiscal flexibility, which is needed for structural reforms, such as the ongoing efforts to diversify the economy - making it less reliant on electronics exports - and to enhance cost competitiveness.
'The high fiscal flexibility also provides additional cushioning against potential economic and fiscal shocks,' said Standard & Poor's credit analyst Phua Yee Farn.
The city-state is facing its worst-ever recession in 2009, but the government's considerable external and fiscal reserves allowed it to unveil a bumper economic package in January worth $20.5 billion (8 per cent of GDP), focusing on job retention and freeing up credit.
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT><TABLE border=0 cellSpacing=0 cellPadding=4 width=300 align=right><TBODY><TR><TD vAlign=top align=middle>
<!-- AdSpace --><IFRAME height=250 marginHeight=0 src="http://ads.asia1.com.sg/html.ng/site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250" frameBorder=0 width=300 marginWidth=0 scrolling=no bordercolor="#000000"><script language='JavaScript1.1' src='http://ads.asia1.com.sg/js.ng/Params.richmedia=yes&site=tbto&sec=btointhenews&cat1=bnews&cat2=btointhenewsart&size=300X250'></script><noscript>
The ratings on Singapore are also supported by the country's political stability. The government has consistently embraced a pragmatic and forward- looking approach to policymaking, said S&P.
Given its small and open economy, however, Singapore is more exposed to exogenous shocks than some of its peers, it noted. Nevertheless, Singapore's history of recovery from past recessions is remarkable. GDP contraction of 1.4 per cent in the 1998 financial crisis was followed by swift return to growth of 7.2 per cent in 1999 and 10.1 per cent in 2000.
Although Singapore's export base has become more diversified since then, its economic performance remains vulnerable to global demand. Given the small size of its domestic market, it has no significant room to shift its focus to more domestic-oriented growth, unlike some of its neighbouring countries.
'This vulnerability is in part mitigated by the government's fiscal flexibility to deal with cyclical shocks and the continued efforts in structural reforms to ensure the economy remains competitive,' Mr Phua said.
Effective regulation, coupled with banks' ample liquidity, good capitalisation, and the bulk of their exposure being to the local market, has mitigated some of the effects from the global financial fallout. -- Reuters
</TD></TR></TBODY></TABLE>
