S&P awards Singapore AAA credit rating despite ageing population

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Standard & Poor’s Rating Services (S&P) released a media statement this week stating that Singapore’s Budget for the fiscal year 2015 ‘shows the strength of the government’s institutional and governance efficiency’, and that it will keep Singapore’s credit strong despite its ageing population.
Standard & Poor’s Rating Services (S&P) released a media statement this week stating that Singapore’s Budget for the fiscal year 2015 ‘shows the strength of the government’s institutional and governance efficiency’, and that it will keep Singapore’s credit strong despite its ageing population.

A day after the Budget was announced, the agency issued a top AAA unsolicited rating for the country. (Not to be interpreted as a change to the country’s official credit rating). While the government forecast a projected budget allowance of S$6.7 billion in the fiscal year ending March 2016, S&P stated the estimations show that funds will remain in surplus until the end of the fiscal year 2016.

S&P also noted that investments in the SGD $69 billion budget, which include efforts to boost skills training, innovation and also funding to meet the needs of Singapore’s ageing citizens, did not affect the SGD $706 million transferred to households. “These measures should continue to sustain Singapore’s credit strengths even as the population is aging at one of the fastest rates in Asia.’

S&P Credit Analyst Yee Farn Phua added “The Singapore budget focuses on long term financial challenges even as it addresses the immediate capacity constraints in transport and health services, where we will see significant increases in spending.”