“Rising costs related to an ageing demographic would be offset by Singapore’ s CPF system”. Moody’s affirms Singapore top-level Aaa rating

Moody’s affirms Singapore top-level Aaa rating
Singapore’s Central Business District skyline. TODAY file photo

Published: June 19,  news  source link ->Moody’s affirms Singapore top-level Aaa rating

Moody’s affirms Singapore top-level Aaa rating

Stable outlook expected to remain over next 12 to 18 months

SINGAPORE — Moody’s Investors Service today (June 19) reaffirmed Singapore’s top-tier Aaa credit rating, citing the Republic’s “very strong fiscal and debt metrics, strong growth outlook over the coming five years, and an extraordinarily large net external creditor position”.

In a press statement accompanying the release of its Singapore credit analysis report for investors, the ratings agency assessed the credit profile of the city-state according to the four areas of its Sovereign Bond Rating Methodology:

• Economic Strength: Very High (-)

• Institutional Strength: Very High (+)

• Fiscal Strength: Very High (+)

• Susceptibility to Event Risk: Very Low

Singapore’s long-term issuer rating — Aaa with a stable outlook — is unlikely to change over the next 12 to 18 months, “given the government’s very strong credit fundamentals”, Moody’s said.

But the ratings agency noted credit challenges on the horizon, including the possibility of regional political or economic instability, rising domestic social pressures due to a rise in the cost of living and “other side effects stemming from the implementation of the government’s economic restructuring programme”.

To stay credit positive at the highest ratings level, Moody’s recommended that Singapore maintains “a market-friendly and fiscally prudent economic policy approach”.

In giving Singapore the fiscal strength rating of “Very high (+)”, Moody’s cited the country’s “very strong fiscal and government debt metrics, which are supported by a prudent fiscal policy framework, the specific nature of the Singapore government securities market, and sizeable government assets”.

“These will help mitigate the expected medium-term impact from an ageing society on both government revenues and expenditures,” said Moody’s, adding that the rising costs related to an ageing demographic would be offset by the country’s CPF system.

“Singapore’s fully funded compulsory pension system and the absence of a comprehensive government-funded social welfare system mitigate future liabilities,” the statement read. CHANNEL NEWSASIA

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What the alternatives would say :

When it’s a negative report of Singapore, they say it’s reliable.
When it’s a positive report of Singapore, they say it’s unreliable.

images source : The Silent Majority – Singapore

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