Bangkok--26 Oct--Moody's Investors Service
Moody's Investors Service issued a new sovereign report on Singapore that explains the reasoning behind the city state's Aaa rating and stable ratings outlook.
"Singapore's ratings are based on our assessment of its very high economic resilience and robust government finances," said Mr. Aninda Mitra, Moody's Vice-President/Senior Analyst.
"Its economic resilience is derived from its high per-capita income, strong human capital base, flexible labor and product markets, and efficient governance and credible policies," says Mitra, adding that, "Singapore's economic model and institutions have faced pressures arising from its openness and small size, but which have ably withstood global economic and financial volatility."
"Singapore's financial robustness is underpinned by its large net asset position which has withstood the recent deterioration in its fiscal position and volatility in the market value of its overseas investments," writes Mitra. "The risk of sudden, adverse shifts in regional or domestic political stability is low, and the banking system is reasonably positioned to cope with prolonged global financial volatility or weakness in domestic demand."
Mr. Mitra noted that income inequality has increased to a high level in recent years amidst the rapid growth in Singapore's upper income levels.
"However, this has not adversely affected social cohesiveness."
Furthermore, ongoing countercyclical policies and evolving medium-term economic strategies should position Singapore to effectively exploit regional and global growth opportunities whilst also enhancing "social inclusiveness."
The sovereign credit report on Singapore can be accessed at www.moodys.com
The principal methodology used in rating the government of Singapore is Moody's Sovereign Bond Methodology. This can also be found at www.moodys.com, in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.
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Singapore
Aninda S. Mitra
Vice President - Senior Analyst
Sovereign Risk Group
Moody's Singapore Pte Ltd.
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Singapore
Thomas J. Byrne
Senior Vice President - Regional Credit Officer Sovereign Risk Group Moody's Singapore Pte Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (65) 6398-8308