S&P affirms Singapore's rating at 'AAA/A-1+' on robust public finances; outlook stable

S&P Global Ratings agency has affirmed its unsolicited 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the Republic of Singapore. The outlook remains stable. It also affirmed the 'axAAA' long-term and 'axA-1+' short-term ASEAN regional scale credit ratings on Singapore.

S&P said that Singapore benefits from robust fiscal and external positions, strong institutions, and prudent economic management. Despite its susceptibility to external shocks due to its small and open economy, extensive fiscal and external buffers attenuate this vulnerability, it noted.

The agency said it expects Singapore will continue its economic resilience, apply fiscal flexibility, and sustain its strong net external creditor position over the next two years. It expects Singapore's GDP growth on a per capita basis to slow to below 2.0 percent over the medium term. That said, the projected slower growth would still be above those of sovereign peers at similar income levels, it added.

The Monetary Authority of Singapore has effectively kept inflation in check, overseen the development of a deep capital market, and maintained a well-regulated banking sector. S&P expects the indirect tightening of monetary conditions to continue in Singapore, as domestic interest rates move with U.S. interest rates.