This report does not constitute a rating action.
Key Takeaways
- Improving external conditions and the reopening of China provide relief to Asia-Pacific sovereigns.
- Twenty of the 21 sovereign ratings in Asia-Pacific have stable outlooks, reflecting rating cushions that could absorb likely pressures in the next year or so.
- Geopolitical tensions, commodity prices, COVID-19, and inflation remain risks to watch.
Rating Outlook And Trends
Green shoots--for now. Developments in late 2022 helped to ease the credit pressures on Asia-Pacific sovereigns. Financing conditions, inflation, external imbalances, and geopolitical tensions are now less likely to worsen materially enough to trigger sovereign downgrades. And while slowdowns in the advanced economies weigh on Asian exports, the expected rebound of the Chinese economy this year should provide some offset. At the beginning of 2023, the outlooks on all Asia-Pacific sovereign ratings are stable; Sri Lanka (SD/--/SD) is the exception.
Most sovereign ratings in Asia-Pacific are investment grade (see chart 1). The average sovereign rating in the region, lying between 'BBB' and 'BBB+', moved closer to 'BBB' in 2022 on account of our downgrades of Pakistan and Sri Lanka. Twenty of the 21 sovereign ratings in Asia-Pacific had stable outlooks as of Dec. 31, 2022 (see chart 3). There is no outlook on Sri Lanka since it is in default.
Chart 1
In the second half of 2022, only the ratings on Pakistan changed. S&P Global Ratings revised the outlooks on the then-'B-' long-term credit ratings on Pakistan to negative from stable in July. We subsequently lowered the ratings to 'CCC+/Stable/C' in late December. There were no positive rating actions in the period.
Chart 2
The deteriorating credit support for Pakistan reflected its weakened external metrics. This weakening resulted from higher commodity prices and tighter international financing conditions. Despite government measures to reduce subsidies and the subsequent improvement in Pakistan's current account balance, the Pakistani rupee depreciated further, and foreign exchange reserve levels continued to fall. These trends materially increased the credit risks the government faces.
Chart 3
Credit risks have come off a little…
Since late 2022, credit conditions for Asia-Pacific sovereigns have improved somewhat. Even if the improvements did not stop the downgrade of Pakistan, they lessened the risks to the ratings on other sovereigns. The situation, however, remains one of unusually high uncertainty. Several potential developments could increase the drag on sovereign credit quality again.
The most important credit-positive implication of recent events is to relieve the external pressures on several Asia-Pacific sovereigns. Crude oil prices rose in January 2023, but they remain well below the recent peak around the middle of 2022. For the many energy importers in Asia, this should help keep their current account deficits under control. Easing inflationary pressures in the advanced economies, especially in the U.S., have also bolstered external financing conditions for developing Asia. This likely also contributed to the recent rebounds in their exchange rates vis-à-vis the U.S. dollar.
The surprising speed of the easing of COVID-19 restrictions in China could also help to offset some of the drag from slower advanced market growth. We expect the ongoing deceleration of activities in the U.S. and Europe to cut demand for Asian exports. The rebound of consumer activities in China could cushion the decline in exports elsewhere in the region. Later in 2023, when outbound Chinese travel is widely expected to pick up more strongly, some Asia-Pacific economies could also benefit from increased tourism receipts.
This year could see some stabilization in the U.S.-China relationship. The U.S. is likely to continue its pressure on China's high-tech industry and strengthen defense cooperation with its allies in the Asia-Pacific. The two countries are also likely to continue their military activities around Taiwan and the South China Sea. Nevertheless, recent contacts and planned visits of high-level officials between the two countries suggest a common interest in preventing a serious deterioration in ties. This should moderate the risks of unintended conflicts triggered by accidents or misunderstandings.
…But stay high
Even if geopolitical risks are not growing, tensions in East Asia remain high. Apart from possible accidents involving military assets of the major powers in the region, there is also the potential for provocations from North Korea. The regime has advanced its weapon development following a series of tests in 2022. It could soon ratchet up tensions to force a negotiation to ease the economic sanctions imposed on it. In such a situation, misunderstood intentions could inflame tensions that in turn affect trade and financial markets.
External balance sheets, weakened by the events of 2022, could face renewed strain if commodity prices rebound sharply. Most sovereigns have not yet had the opportunity to repair the recent damage to external metrics. Further deterioration of their external balances could push some sovereign rating outlooks toward a negative change. One possible trigger is if the ongoing recovery in the Chinese economy causes a much sharper rebound in commodity prices--especially for energy--than what we have seen so far.
If this reversal provokes increased government subsidies, some governments may face much greater budgetary strains. Over the past year, several governments have made fiscal transfers to households to offset rising costs of living. This sometimes came on top of measures to cushion the economic impact of COVID-19. For some sovereigns, a further increase in subsidies, coupled with higher government borrowing costs, could weaken fiscal support for the ratings on them.
Table 1
| Asia-Pacific Sovereign Rating Score Snapshot | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Issuer | Sovereign foreign currency ratings | Institutional assessment | Economic assessment | External assessment | Fiscal assessment, budget performance | Fiscal assessment, debt | Monetary assessment | |||||||||
| Australia | AAA/Stable/A-1+ | 1 | 1 | 5 | 2 | 2 | 1 | |||||||||
| Bangladesh | BB-/Stable/B | 5 | 4 | 3* | 6 | 5 | 4 | |||||||||
| China | A+/Stable/A-1 | 3 | 3 | 1 | 4 | 2 | 3 | |||||||||
| Cook Islands | B+/Stable/B | 5 | 4 | 5 | 5 | 1 | 6 | |||||||||
| Fiji | B+/Stable/B | 5 | 5 | 3 | 4 | 6 | 5 | |||||||||
| Hong Kong | AA+/Stable/A-1+ | 3 | 1 | 1 | 1 | 2 | 2 | |||||||||
| India | BBB-/Stable/A-3 | 3 | 4 | 1 | 6 | 6 | 3 | |||||||||
| Indonesia | BBB/Stable/A-2 | 3 | 4 | 3 | 3 | 4 | 3 | |||||||||
| Japan | A+/Stable/A-1 | 2 | 2 | 1 | 6 | 6 | 2 | |||||||||
| Korea | AA/Stable/A-1+ | 3 | 1 | 1 | 1 | 4 | 2 | |||||||||
| Malaysia | A-/Stable/A-2 | 3 | 3 | 2 | 4 | 5 | 2 | |||||||||
| Mongolia | B/Stable/B | 5 | 5* | 6 | 4 | 4§ | 4 | |||||||||
| New Zealand | AA+/Stable/A-1+ | 1 | 1 | 5 | 3 | 3* | 1 | |||||||||
| Pakistan | CCC+/Stable/C | 6 | 5 | 6* | 6 | 6 | 4 | |||||||||
| Papua New Guinea | B-/Stable/B | 5 | 6 | 5 | 6 | 6 | 5 | |||||||||
| Philippines | BBB+/Stable/A-2 | 4 | 4 | 1 | 3 | 4 | 3 | |||||||||
| Singapore | AAA/Stable/A-1+ | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||
| Sri Lanka | SD/--/SD | 6 | 6* | 6 | 6 | 6 | 4 | |||||||||
| Taiwan | AA+/Stable/A-1+ | 3 | 1 | 1 | 2 | 2 | 2 | |||||||||
| Thailand | BBB+/Stable/A-2 | 4 | 4 | 1 | 3 | 3 | 2 | |||||||||
| Vietnam | BB+/Stable/B | 4 | 4 | 3 | 4 | 4 | 4 | |||||||||
| 1 (%) | 14.3 | 28.6 | 42.9 | 14.3 | 9.5 | 14.3 | ||||||||||
| 2 (%) | 4.8 | 4.8 | 4.8 | 9.5 | 19.0 | 28.6 | ||||||||||
| 3 (%) | 33.3 | 9.5 | 19.0 | 19.0 | 9.5 | 19.0 | ||||||||||
| 4 (%) | 14.3 | 33.3 | 0.0 | 23.8 | 23.8 | 23.8 | ||||||||||
| 5 (%) | 23.8 | 14.3 | 19.0 | 4.8 | 9.5 | 9.5 | ||||||||||
| 6 (%) | 9.5 | 9.5 | 14.3 | 28.6 | 28.6 | 4.8 | ||||||||||
| Median | 3.0 | 4.0 | 2.0 | 4.0 | 4.0 | 3.0 | ||||||||||
| Mean | 3.6 | 3.1 | 2.7 | 3.8 | 3.9 | 3.0 | ||||||||||
| Standard deviation | 1.5 | 1.6 | 2.0 | 1.8 | 1.8 | 1.4 | ||||||||||
| *Deterioration since June 2022. §Improvement since June 2022. | ||||||||||||||||
Table 2
| Asia-Pacific Economic Outlook | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Real GDP growth (%) | GG balance / GDP (%) | Net GG debt / GDP (%) | Current account balance / GDP (%) | Narrow net ext. debt / CAR (%) | ||||||||||||||||||
| 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | |||||||||||||
| Australia | 3.88 | 3.26 | (3.22) | (3.04) | 28.57 | 30.19 | 2.18 | 1.62 | 203.29 | 222.74 | ||||||||||||
| Bangladesh | 7.20 | 6.70 | (5.10) | (4.90) | 28.22 | 31.17 | (4.19) | (3.49) | 63.82 | 73.16 | ||||||||||||
| China | 3.22 | 4.78 | (3.20) | (3.00) | 58.71 | 57.98 | 3.74 | 2.07 | (51.60) | (55.78) | ||||||||||||
| Cook Islands | 11.80 | 13.00 | (11.30) | (8.00) | 36.82 | 37.13 | 46.78 | 38.78 | (26.97) | (24.77) | ||||||||||||
| Fiji | 12.38 | 9.23 | (13.03) | (7.29) | 77.49 | 77.16 | (12.90) | (11.00) | 23.75 | 31.28 | ||||||||||||
| Hong Kong | (2.59) | 3.79 | (3.20) | (0.80) | (28.42) | (26.03) | 8.63 | 8.11 | (56.88) | (51.24) | ||||||||||||
| India | 7.00 | 6.00 | (10.30) | (9.40) | 85.24 | 84.23 | (3.02) | (2.49) | (6.18) | (2.21) | ||||||||||||
| Indonesia | 5.29 | 4.98 | (3.80) | (2.80) | 37.58 | 38.05 | 1.13 | 0.05 | 69.26 | 67.60 | ||||||||||||
| Japan | 1.73 | 0.95 | (6.00) | (5.20) | 168.53 | 168.41 | 0.13 | 0.76 | (86.99) | (75.52) | ||||||||||||
| Korea | 2.72 | 1.43 | (3.20) | (1.00) | 10.20 | 10.64 | 2.96 | 1.48 | (33.51) | (31.54) | ||||||||||||
| Malaysia | 8.90 | 3.20 | (5.00) | (3.70) | 66.51 | 68.87 | 2.85 | 2.36 | 23.61 | 20.93 | ||||||||||||
| Mongolia | 2.50 | 6.00 | (1.00) | (2.80) | 60.38 | 55.68 | (14.42) | (10.38) | 166.80 | 153.77 | ||||||||||||
| New Zealand | 1.02 | 3.20 | (7.31) | (4.49) | 27.32 | 29.39 | (7.74) | (5.79) | 181.15 | 175.98 | ||||||||||||
| Pakistan | 5.97 | 2.00 | (7.86) | (6.50) | 68.05 | 69.49 | (4.70) | (3.34) | 151.79 | 175.14 | ||||||||||||
| Papua New Guinea | 4.77 | 4.31 | (6.00) | (4.80) | 48.24 | 49.48 | 22.62 | 21.36 | 109.93 | 107.98 | ||||||||||||
| Philippines | 7.07 | 5.17 | (5.00) | (3.80) | 42.82 | 43.02 | (5.02) | (3.44) | (12.33) | (9.53) | ||||||||||||
| Singapore | 3.60 | 2.30 | (0.18) | 1.00 | (49.31) | (52.33) | 20.19 | 19.66 | (77.25) | (75.04) | ||||||||||||
| Sri Lanka | (8.70) | (3.00) | (11.00) | (9.00) | 135.69 | 141.59 | (3.32) | (1.99) | 207.00 | 203.32 | ||||||||||||
| Taiwan | 2.20 | 1.51 | (1.50) | (1.60) | 31.09 | 31.54 | 9.99 | 9.81 | (88.45) | (89.35) | ||||||||||||
| Thailand | 2.90 | 3.49 | (3.50) | (3.20) | 40.12 | 41.27 | (0.84) | 1.60 | (20.31) | (18.65) | ||||||||||||
| Vietnam | 8.30 | 6.30 | (4.80) | (4.10) | 32.76 | 33.76 | 0.40 | 0.66 | 15.98 | 12.93 | ||||||||||||
| Note: GDP growth for India and Japan are for fiscal years. For India, 2021 = FY 2021 / 22, 2022 = FY 2022 / 23, 2023 = FY 2023 / 24, 2024 = FY 2024 / 25, 2025 = FY 2025 / 26. GG--General government. CAR--Current account receipts. Source: S&P Global Ratings. | ||||||||||||||||||||||
Twin demons of inflation and COVID
In Japan, inflation continues to bite. If a new wave of international price increases keep inflation high, the pressure on the Bank of Japan (BOJ) will likely intensify. Until recently, the BOJ has resisted major policy shifts. However, the persistence of Japanese consumer price inflation could force the central bank into a more sudden tightening of monetary conditions than most expect. The credit impact could be magnified by the heavy public debt burden and an economy used to a long period of very low borrowing costs.
A more difficult risk to assess is the impact of the rapid spread and evolution of COVID in China. Since the outbreak, the virus has mutated but not led to deadlier strains. Nevertheless, the risk of a mutation that leads to a highly transmissible and much deadlier strain is not zero. Such a development would inflict another big shock on sovereign credit conditions across the world.
Rating levels will hold. The uniformly stable outlooks on Asia-Pacific sovereign ratings indicate that most ratings will withstand the stresses presented by the most likely credit scenario in the next year or two. Even with more recent positive developments, however, the risks to sovereign credit trends mean that we are unlikely to see a higher average rating level in the next year or so.
Australia (AAA/Stable/A-1+)
- Analyst: anthony.walker@spglobal.com
- Latest publication: Australia (full analysis), Jan. 26, 2022
Rating score snapshot:
- Institutional assessment: 1
- Economic assessment: 1
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 2
- Fiscal assessment – Debt burden: 2
- Monetary assessment: 1
Outlook: Stable
The stable outlook reflects our expectations that the general government fiscal deficits will narrow. We expect the budget to be supported by steady revenue growth, aided by commodity prices and expenditure restraint. We believe Australia's external accounts are likely to remain stronger than in the past and be resilient during potential crises.
Downside scenario
We could lower our ratings if we believe the general government deficit is unlikely to narrow over the next two years. This could occur if the economy underperforms our expectations, there are prolonged lockdowns, the government implements substantial additional fiscal stimuli because of large unforeseen outbreaks, or commodity prices fall much faster and further than we expect. A sharp fall in commodity prices could reverse recent gains in Australia's external accounts.
Australia's weak external position means that its other sovereign credit factors, including the fiscal factors, need to be strong to keep the sovereign rating at the highest level on our scale. A stronger fiscal position would also be a strong buffer to absorb the consequences of an abrupt weakening of the housing market and the vulnerabilities such an event could bring to financial stability.
Table 3
| Australia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 49.9 | 53.9 | 57.2 | 54.9 | 51.7 | 60.1 | 62.3 | 62.4 | 63.4 | 67.9 | ||||||||||||
| GDP growth | 2.7 | 2.3 | 2.9 | 2.1 | 0.0 | 1.6 | 3.9 | 3.3 | 1.5 | 2.4 | ||||||||||||
| GDP per capita growth | 1.2 | 0.6 | 1.3 | 0.6 | (1.2) | 1.5 | 2.9 | 2.1 | 0.2 | 0.9 | ||||||||||||
| Current account balance/GDP | (4.6) | (2.3) | (2.8) | (0.9) | 1.6 | 3.1 | 2.2 | 1.6 | (0.8) | (0.8) | ||||||||||||
| Gross external financing needs/CAR & FXR | 274.3 | 250.8 | 232.3 | 222.0 | 217.8 | 217.4 | 198.5 | 205.9 | 202.1 | 195.8 | ||||||||||||
| Narrow net external debt/CAR | 320.3 | 273.6 | 260.1 | 248.7 | 263.8 | 277.1 | 203.3 | 222.7 | 225.6 | 215.8 | ||||||||||||
| GG balance/GDP | (2.4) | (2.1) | (1.0) | (0.7) | (6.8) | (9.4) | (3.2) | (3.0) | (2.5) | (2.4) | ||||||||||||
| GG net debt/GDP | 11.8 | 11.2 | 13.3 | 12.1 | 19.3 | 28.0 | 28.6 | 30.2 | 32.2 | 33.3 | ||||||||||||
| CPI inflation | 1.4 | 1.7 | 1.9 | 1.7 | 1.3 | 1.6 | 4.5 | 7.0 | 4.8 | 3.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 158.3 | 157.4 | 156.4 | 153.6 | 175.9 | 169.6 | 168.7 | 161.3 | 161.9 | 158.0 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Bangladesh (BB-/Stable/B)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Bangladesh 'BB-/B' Ratings Affirmed; Outlook Stable, Aug. 25, 2022
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 4
- External assessment: 3
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 5
- Monetary assessment: 4
Outlook: Stable
The stable outlook reflects our expectation that Bangladesh's solid growth prospects and policy adjustments will manage the risks associated with a challenging external landscape over the next 12 months.
Downside scenario
We may lower the ratings on Bangladesh if net external debt or financing metrics worsen further, such that narrow net external debt surpasses 100% of current account receipts, or gross external financing needs exceed 100% of current account receipts plus usable reserves, on a sustained basis. Lower generation of current account receipts than we expect, higher overall current account deficit than we forecast, or a further material decline in foreign exchange reserves would be indications of further weakening.
Upside scenario
We may upgrade Bangladesh if the government materially improves its fiscal outcomes, including its very low revenue generation and elevated fiscal deficits, and experiences a substantial improvement in its external settings. We may also raise the ratings if we observe that Bangladesh's institutional settings have markedly improved.
Table 4
| Bangladesh | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 1.7 | 1.8 | 2.0 | 2.1 | 2.3 | 2.5 | 2.7 | 2.6 | 2.7 | 2.9 | ||||||||||||
| GDP growth | 7.1 | 6.6 | 7.3 | 7.9 | 3.5 | 6.9 | 7.2 | 6.7 | 7.0 | 7.0 | ||||||||||||
| GDP per capita growth | 6.0 | 5.5 | 6.2 | 6.8 | 2.4 | 5.7 | 6.0 | 5.5 | 5.8 | 5.8 | ||||||||||||
| Current account balance/GDP | 1.6 | (0.5) | (3.0) | (1.3) | (1.5) | (1.1) | (4.2) | (3.5) | (2.5) | (2.0) | ||||||||||||
| Gross external financing needs/CAR&FXR | 71.0 | 74.8 | 84.1 | 84.2 | 88.4 | 78.4 | 93.0 | 98.4 | 94.0 | 92.8 | ||||||||||||
| Narrow net external debt/CAR | 15.4 | 16.7 | 35.4 | 49.8 | 40.1 | 48.6 | 63.8 | 73.2 | 78.1 | 79.4 | ||||||||||||
| GG balance/GDP | (3.1) | (3.8) | (4.8) | (4.7) | (4.8) | (3.7) | (5.1) | (4.9) | (4.7) | (4.5) | ||||||||||||
| GG net debt/GDP | 19.3 | 19.6 | 20.3 | 21.8 | 23.7 | 25.1 | 28.2 | 31.2 | 32.6 | 33.7 | ||||||||||||
| CPI inflation | 5.5 | 5.7 | 5.5 | 5.6 | 5.7 | 5.6 | 6.5 | 6.8 | 6.0 | 6.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 38.9 | 41.5 | 41.3 | 40.5 | 40.6 | 40.5 | 40.3 | 40.5 | 40.4 | 40.4 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
China (A+/Stable/A-1)
- Analyst: rain.yin@spglobal.com
- Latest publication: China Ratings Affirmed At 'A+/A-1'; Outlook Remains Stable, June 29, 2022
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 3
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 2
- Monetary assessment: 3
Outlook: Stable
The stable outlook reflects our view that China will maintain above-average growth over the next two to three years, even as the economy experiences short-term disruptions due to its dynamic zero-COVID policy.
Downside scenario
A downgrade could ensue if we see an increased likelihood that China will allow higher credit growth to support economic expansion in an unsustainable manner. Such a trend could weaken the Chinese economy's resilience to shocks, resulting in a sharp build-up in debt that could undermine financial stability, especially at the local government level, and increasing the likelihood of a sustained and significant decline in the GDP growth rate.
We could also lower the ratings if we believe China's fiscal performance could be materially weaker than our current projections.
Upside scenario
We may raise our ratings on China if measures to restrict unsustainable growth in credit and off-budget borrowings are maintained. Such measures may also improve our assessment of monetary policy credibility, fiscal balance, as well as policymakers' ability to formulate and implement policies to promote balanced growth and sustainable fiscal performance.
We could also raise our ratings if China's sustained above-average growth results in a stronger economic assessment as its average income level increases materially.
Table 5
| China | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 8.1 | 8.8 | 9.9 | 10.1 | 10.4 | 12.6 | 12.7 | 12.8 | 14.0 | 15.4 | ||||||||||||
| GDP growth | 6.7 | 7.0 | 6.8 | 6.0 | 2.4 | 8.1 | 3.2 | 4.8 | 4.7 | 4.6 | ||||||||||||
| GDP per capita growth | 6.0 | 6.4 | 6.4 | 5.6 | 2.2 | 8.1 | 2.9 | 4.5 | 4.5 | 4.4 | ||||||||||||
| Current account balance/GDP | 1.7 | 1.5 | 0.2 | 0.7 | 1.7 | 1.8 | 3.7 | 2.1 | 1.2 | 1.1 | ||||||||||||
| Gross external financing needs/CAR&FXR | 48.2 | 54.2 | 60.5 | 61.0 | 57.4 | 60.9 | 59.3 | 67.0 | 69.8 | 70.1 | ||||||||||||
| Narrow net external debt/CAR | (105.7) | (90.9) | (78.0) | (79.6) | (76.6) | (56.9) | (51.6) | (55.8) | (55.2) | (54.4) | ||||||||||||
| GG balance/GDP | (2.8) | (2.4) | (2.8) | (4.3) | (9.5) | (4.8) | (3.2) | (3.0) | (2.8) | (2.5) | ||||||||||||
| GG net debt/GDP | 47.4 | 47.2 | 47.6 | 48.2 | 56.2 | 55.4 | 58.7 | 58.0 | 57.1 | 57.5 | ||||||||||||
| CPI inflation | 2.0 | 1.6 | 2.1 | 2.9 | 2.5 | 0.9 | 2.1 | 2.6 | 2.4 | 2.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 182.3 | 180.1 | 186.0 | 190.4 | 206.7 | 199.7 | 208.4 | 213.9 | 219.4 | 225.1 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Cook Islands (B+/Stable/B)
- Analyst: rebecca.hrvatin@spglobal.com
- Latest publication: Cook Islands 'B+/B' Ratings Affirmed; Outlook Stable, Feb. 25, 2022
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 4
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 5
- Fiscal assessment – Debt burden: 1
- Monetary assessment: 6
Outlook: Stable
The stable outlook on our long-term ratings on Cook Islands reflects our expectation of narrowing fiscal deficits and slower increases in government debt over the next few years, driven by improving economic growth.
Downside scenario
We could lower our ratings over the next 12 months if the effects of the pandemic were greater or more prolonged than we currently expect. This could cause public finances to underperform our forecasts with continued large fiscal deficits and higher net government debt.
Upside scenario
We could raise our ratings over the next 12 months if there is a sustained improvement in data disclosure and quality, leading to increased transparency about the country's external liquidity and indebtedness.
Table 6
| Cook Islands | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 23.5 | 25.8 | 28.4 | 28.7 | 24.9 | 23.1 | 25.1 | 27.6 | 31.5 | 32.7 | ||||||||||||
| GDP growth | 5.5 | 6.8 | 8.9 | 5.3 | (5.2) | (29.1) | 11.8 | 13.0 | 8.7 | 4.1 | ||||||||||||
| GDP per capita growth | 9.8 | 5.9 | 8.1 | 4.5 | (6.0) | (29.7) | 10.9 | 12.1 | 7.9 | 3.3 | ||||||||||||
| Current account balance/GDP | 32.5 | 16.7 | 35.1 | 34.2 | 49.0 | 38.7 | 46.8 | 38.8 | 29.7 | 27.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||
| Narrow net external debt/CAR | (10.3) | (20.4) | (24.3) | (40.1) | (43.2) | (25.5) | (27.0) | (24.8) | (23.4) | (21.7) | ||||||||||||
| GG balance/GDP | (1.7) | 6.8 | 4.1 | 5.0 | (6.3) | (23.1) | (11.3) | (8.0) | (4.5) | (2.0) | ||||||||||||
| GG net debt/GDP | 7.5 | (0.3) | (7.5) | (2.7) | 2.4 | 25.0 | 36.8 | 37.1 | 35.3 | 34.6 | ||||||||||||
| CPI inflation | (0.1) | (0.1) | 0.4 | 0.0 | 0.7 | 2.2 | 3.2 | 3.5 | 4.0 | 0.6 | ||||||||||||
| Bank credit to resident private sector/GDP | 52.3 | 50.2 | 45.9 | 41.8 | 46.7 | 53.1 | 43.9 | 39.3 | 35.9 | 36.3 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. N/A--not applicable. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Fiji (B+/Stable/B)
- Analyst: martin.foo@spglobal.com
- Latest publication: Fiji 'B+/B' Ratings Affirmed; Outlook Stable, Sept. 28, 2022
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 5
- External assessment: 3
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 5
Outlook: Stable
The stable rating outlook reflects our expectation of a tourism-led economic recovery over the next few years, following a deep contraction over 2020-2021. As international travel resumes, we expect a combination of renewed GDP growth and higher export earnings to lead to narrower fiscal and current account deficits and a stabilizing public debt burden.
Downside scenario
We could lower our ratings on Fiji if its budgetary or external metrics significantly weakened. This might be caused, for example, by renewed disruptions to international tourism, a severe natural disaster, or a reversal of the government's fiscal consolidation strategy.
Upside scenario
We could raise our ratings on Fiji if economic growth and tourism receipts recover faster than we project. This could result in a quicker pace of fiscal consolidation and declining debt.
We could also raise our ratings if we observe continued improvements in Fiji's institutional and policy settings following imminent general elections, providing greater support for sustainable finances and balanced growth in the medium term, or if Fiji's extensive foreign exchange restrictions are unwound without detriment to its official reserves.
Table 7
| Fiji | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 5.7 | 6.1 | 6.3 | 6.1 | 5.0 | 5.0 | 5.4 | 5.7 | 6.1 | 6.4 | ||||||||||||
| GDP growth | 2.4 | 5.4 | 3.8 | (0.6) | (17.2) | (4.1) | 12.4 | 9.2 | 5.0 | 4.0 | ||||||||||||
| GDP per capita growth | 2.0 | 3.7 | 3.2 | (1.2) | (17.6) | (4.6) | 11.7 | 8.6 | 4.4 | 3.4 | ||||||||||||
| Current account balance/GDP | (3.6) | (6.7) | (8.5) | (12.7) | (13.8) | (15.2) | (12.9) | (11.0) | (9.5) | (8.5) | ||||||||||||
| Gross external financing needs/CAR&FXR | 98.5 | 100.0 | 101.1 | 111.3 | 109.3 | 108.2 | 97.0 | 100.5 | 103.0 | 105.6 | ||||||||||||
| Narrow net external debt/CAR | (9.9) | (10.5) | 3.5 | 9.8 | 25.8 | 14.6 | 23.8 | 31.3 | 35.1 | 37.9 | ||||||||||||
| GG balance/GDP | (1.3) | (1.9) | (4.3) | (3.5) | (6.6) | (11.2) | (13.0) | (7.3) | (3.5) | (3.1) | ||||||||||||
| GG net debt/GDP | 38.8 | 36.1 | 40.1 | 43.8 | 63.2 | 74.4 | 77.5 | 77.2 | 75.2 | 73.5 | ||||||||||||
| CPI inflation | 3.9 | 3.4 | 4.1 | 1.8 | (2.6) | 0.2 | 6.5 | 3.5 | 3.0 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 69.3 | 70.3 | 71.1 | 72.9 | 87.7 | 91.8 | 83.5 | 80.6 | 80.2 | 80.3 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Hong Kong (AA+/Stable/A-1+)
- Analyst: rain.yin@spglobal.com
- Latest publication: Hong Kong Ratings Affirmed At 'AA+/A-1+'; Outlook Stable, May 20, 2022
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 1
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 1
- Fiscal assessment – Debt burden: 2
- Monetary assessment: 2
Outlook: Stable
The stable rating outlook reflects our expectation that Hong Kong's economy will recover gradually over the next 12-24 months, supported by a high vaccination rate. Meanwhile, the change in leadership is unlikely to fundamentally affect the Special Administrative Region (SAR) government's autonomy in setting economic policies as laid out in the Basic Law, in our view.
Downside scenario
We could lower the ratings if Hong Kong's economic stability or policy predictability is affected, such that we assess the trend growth to be below that of peers. We could also consider a downgrade if the government depletes fiscal reserves at a much faster pace than we anticipate.
Upside scenario
We could consider an upgrade if Hong Kong's policy environment improves materially, enhancing social and political stability, strengthening public finances, and raising the SAR's long-term economic prospects.
Table 8
| Hong Kong | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 43.7 | 46.2 | 48.5 | 48.4 | 46.1 | 49.8 | 49.0 | 52.6 | 55.8 | 58.2 | ||||||||||||
| GDP growth | 2.2 | 3.8 | 2.9 | (1.7) | (6.6) | 6.3 | (2.6) | 3.8 | 3.0 | 2.0 | ||||||||||||
| GDP per capita growth | 1.5 | 3.0 | 2.0 | (2.4) | (6.2) | 7.3 | (2.5) | 3.8 | 2.9 | 2.0 | ||||||||||||
| Current account balance/GDP | 4.0 | 4.6 | 3.7 | 5.9 | 7.0 | 11.3 | 8.6 | 8.1 | 6.6 | 5.8 | ||||||||||||
| Gross external financing needs/CAR & FXR | 182.9 | 175.2 | 177.8 | 188.3 | 187.7 | 180.7 | 185.0 | 192.7 | 191.9 | 192.0 | ||||||||||||
| Narrow net external debt/CAR | (69.9) | (65.5) | (59.1) | (62.8) | (71.4) | (56.1) | (56.9) | (51.2) | (43.9) | (36.8) | ||||||||||||
| GG balance/GDP | 4.5 | 5.6 | 2.4 | (0.6) | (9.4) | 0.0 | (3.2) | (0.8) | (0.3) | (0.3) | ||||||||||||
| GG net debt/GDP | (38.9) | (42.1) | (42.0) | (41.3) | (34.7) | (30.8) | (28.4) | (26.0) | (24.6) | (23.2) | ||||||||||||
| CPI inflation | 2.4 | 1.5 | 2.3 | 2.9 | 0.3 | 1.5 | 2.5 | 2.8 | 2.4 | 2.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 218.9 | 237.6 | 232.7 | 248.1 | 268.3 | 262.1 | 277.7 | 272.0 | 269.9 | 271.4 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
India (BBB-/Stable /A-3)
- Analyst: andrew.wood@spglobal.com
- Latest publication: (Full Analysis) India, March 3, 2022
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 4
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 3
Outlook: Stable
The stable outlook reflects our expectation that India's economy will recover following the resolution of the COVID-19 pandemic, and that the country's strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months.
Downside scenario
We may lower the ratings if: (1) India's economic recovery is significantly slower than we expect from fiscal 2022 (year ending March 2022) onward; or (2) net general government deficits and the associated accumulation of indebtedness materially exceed our forecasts, signifying a weakening of the country's institutional capacity to maintain sustainable public finances.
Upside scenario
We may raise the ratings if the Indian economy exhibits a stronger recovery than we expect over the next 24 months, such that the country's long-term growth outperformance is intact and its fiscal metrics dramatically improve.
We may also raise the ratings if we observe a sustained and substantial improvement in the central bank's monetary policy effectiveness and credibility, such that inflation is managed at a durably lower rate over time.
Table 9
| India | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 1.7 | 2.0 | 2.0 | 2.1 | 1.9 | 2.3 | 2.5 | 2.8 | 3.0 | 3.3 | ||||||||||||
| GDP growth | 8.3 | 6.8 | 6.5 | 3.7 | (6.6) | 8.7 | 7.0 | 6.0 | 6.9 | 6.9 | ||||||||||||
| GDP per capita growth | 7.1 | 5.7 | 5.4 | 2.7 | (7.5) | 7.9 | 6.3 | 5.1 | 5.9 | 6.0 | ||||||||||||
| Current account balance/GDP | (0.6) | (1.8) | (2.1) | (0.9) | 0.9 | (1.2) | (3.0) | (2.5) | (1.9) | (1.5) | ||||||||||||
| Gross external financing needs/CAR&FXR | 84.3 | 87.8 | 86.7 | 83.8 | 74.5 | 76.9 | 82.6 | 85.9 | 86.3 | 85.6 | ||||||||||||
| Narrow net external debt/CAR | 9.6 | 8.5 | 10.3 | 2.0 | (17.0) | (12.4) | (6.2) | (2.2) | (0.8) | (1.0) | ||||||||||||
| GG balance/GDP | (7.4) | (6.7) | (6.6) | (7.8) | (13.6) | (11.3) | (10.3) | (9.4) | (8.6) | (8.0) | ||||||||||||
| GG net debt/GDP | 68.7 | 70.0 | 71.5 | 76.6 | 90.8 | 86.7 | 85.2 | 84.2 | 84.0 | 83.2 | ||||||||||||
| CPI inflation | 4.5 | 3.6 | 3.4 | 4.8 | 5.7 | 5.9 | 6.8 | 5.0 | 4.5 | 4.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 52.0 | 51.5 | 52.7 | 52.9 | 56.5 | 51.4 | 50.2 | 49.3 | 48.8 | 48.5 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Indonesia (BBB/Stable/A-2)
- Analyst: andrew.wood@spglobal.com
- Latest publication: (Full analysis) Indonesia, Nov. 22, 2022
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 4
- External assessment: 3
- Fiscal assessment – Flexibility and performance: 3
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 3
Outlook: Stable
The stable outlook reflects our expectation that Indonesia's economic recovery will continue over the next two years, supporting the government's continued fiscal consolidation efforts.
Downside scenario
We may lower the rating if Indonesia's economic recovery stalls such that trend growth in real GDP per capita is no longer faster than that of peers.
Indications that the change in net general government debt will remain above 3% of GDP annually, and that the general government's interest payments would surpass 15% of revenues on a sustained basis would exert downward pressure on the rating.
A significant reversal in Indonesia's current account receipts leading to a weakening in Indonesia's external balance sheet would indicate further downward pressure on the rating.
Upside scenario
We may raise the rating if Indonesia's net external indebtedness falls below 50% of current account receipts, or if gross external financing needs fall below 50% of current account receipts plus usable reserves.
Change in net general government debt of less than 3% of GDP per year, in addition to a net debt stock of less than 30% of GDP or interest payments below 10% of general government revenues, would also indicate upward pressure on the ratings.
Table 10
| Indonesia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 3.6 | 3.8 | 3.9 | 4.1 | 3.9 | 4.3 | 4.6 | 4.7 | 5.0 | 5.5 | ||||||||||||
| GDP growth | 5.0 | 5.1 | 5.2 | 5.0 | (2.1) | 3.7 | 5.3 | 5.0 | 5.0 | 5.0 | ||||||||||||
| GDP per capita growth | 3.8 | 3.8 | 4.0 | 3.9 | (3.1) | 3.0 | 4.6 | 4.2 | 4.1 | 4.2 | ||||||||||||
| Current account balance/GDP | (1.8) | (1.6) | (2.9) | (2.7) | (0.4) | 0.3 | 1.1 | 0.1 | (0.3) | (0.5) | ||||||||||||
| Gross external financing needs/CAR&FXR | 94.2 | 92.1 | 95.9 | 98.2 | 88.6 | 87.0 | 85.9 | 89.8 | 90.3 | 90.7 | ||||||||||||
| Narrow net external debt/CAR | 102.2 | 96.0 | 100.9 | 115.6 | 132.6 | 91.3 | 69.3 | 67.6 | 62.4 | 57.6 | ||||||||||||
| GG balance/GDP | (2.5) | (2.5) | (1.7) | (2.2) | (6.1) | (4.7) | (3.8) | (2.8) | (2.7) | (2.5) | ||||||||||||
| GG net debt/GDP | 26.1 | 26.2 | 27.2 | 27.6 | 35.7 | 37.6 | 37.6 | 38.1 | 37.5 | 36.4 | ||||||||||||
| CPI inflation | 3.0 | 3.6 | 3.1 | 2.8 | 2.0 | 1.6 | 4.4 | 5.0 | 3.7 | 3.6 | ||||||||||||
| Bank credit to resident private sector/GDP | 35.6 | 35.0 | 36.0 | 35.7 | 36.2 | 34.4 | 33.6 | 34.5 | 34.5 | 34.2 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Japan (A+/Stable/A-1)
- Analyst: kimeng.tan@spglobal.com
- Last publication: (Full analysis) Japan, Oct. 27, 2022
Rating score snapshot:
- Institutional assessment: 2
- Economic assessment: 2
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 2
Outlook: Stable
The stable outlook reflects our expectations of steady trends in Japanese sovereign credit metrics on the back of a relatively gradual economic recovery. Over 2023-2025, we expect Japan's real GDP growth to average 1.3% annually. The modest pace of economic recovery will likely also slow the momentum of government revenue growth, while spending pressures on social services and national defense will continue to grow. We expect these factors to keep annual general government deficits above 4.5% of GDP in the next four years.
Downside scenario
We may lower the ratings on Japan if future developments lead to economic growth rates that are persistently and significantly below that of other high-income economies and a return of deflation puts long-term pressure on fiscal performance.
Upside scenario
We may raise the ratings on Japan if we come to believe fiscal repair will proceed significantly faster than we currently anticipate. In this scenario, we would expect the general government deficit to fall below 4% of GDP annually on a sustained basis, allowing the net general government debt level to stabilize or decline relative to nominal GDP. We could also raise the sovereign rating if we believe monetary policy credibility has improved and expectations of low, positive, and stable inflation are well-entrenched in Japan.
Table 11
| Japan | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 39.5 | 39.1 | 39.9 | 40.5 | 39.9 | 39.4 | 33.6 | 32.5 | 35.4 | 38.3 | ||||||||||||
| GDP growth | 0.8 | 1.8 | 0.3 | (0.9) | (4.6) | 2.3 | 1.7 | 1.0 | 1.2 | 1.1 | ||||||||||||
| GDP per capita growth | 0.9 | 2.0 | 0.5 | (0.6) | (4.2) | 2.5 | 2.3 | 1.5 | 1.7 | 1.6 | ||||||||||||
| Current account balance/GDP | 3.9 | 4.1 | 3.5 | 3.5 | 2.9 | 2.9 | 0.1 | 0.8 | 1.6 | 2.1 | ||||||||||||
| Gross external financing needs/CAR&FXR | 157.7 | 171.9 | 168.3 | 180.4 | 188.6 | 201.4 | 191.6 | 195.1 | 193.9 | 193.6 | ||||||||||||
| Narrow net external debt/CAR | (123.3) | (109.0) | (81.8) | (82.9) | (101.5) | (93.3) | (87.0) | (75.5) | (61.7) | (51.5) | ||||||||||||
| GG balance/GDP | (3.5) | (2.9) | (2.4) | (3.1) | (10.1) | (7.3) | (6.0) | (5.2) | (4.8) | (4.8) | ||||||||||||
| GG net debt/GDP | 145.0 | 144.4 | 146.7 | 150.7 | 162.2 | 165.5 | 168.5 | 168.4 | 167.4 | 166.8 | ||||||||||||
| CPI inflation | (0.1) | 0.5 | 0.9 | 0.5 | 0.0 | (0.2) | 2.7 | 1.1 | 1.3 | 1.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 141.9 | 145.3 | 146.9 | 153.4 | 167.8 | 171.7 | 171.9 | 169.8 | 167.2 | 165.1 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Republic of Korea (AA/Stable/A-1+)
- Analyst: kimeng.tan@spglobal.com
- Latest publication: (Full analysis) Korea, Oct. 27, 2022
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 1
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 1
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 2
Outlook: Stable
The stable rating outlook reflects our expectation that Korea will maintain average growth rates that are higher than most other high-income economies over the next three to five years. We also anticipate that the general government account will return to balance from 2024.
We believe geopolitical risks on the Korean peninsula will not escalate to the point of hurting the country's economic fundamentals.
Downside scenario
We would lower the ratings on Korea if we believe that geopolitical tensions related to the Democratic People's Republic of Korea (DPRK; North Korea) will intensify to a point that they would seriously damage Korea's economic, fiscal, or external performance.
Upside scenario
We may raise the sovereign ratings on Korea over the same period if the security and contingent liability risks posed by North Korea recede.
Table 12
| Korea | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 29.3 | 31.6 | 33.4 | 31.9 | 31.7 | 35.0 | 32.9 | 32.9 | 35.7 | 39.6 | ||||||||||||
| GDP growth | 3.0 | 3.2 | 2.9 | 2.2 | (0.7) | 4.2 | 2.7 | 1.4 | 2.2 | 2.1 | ||||||||||||
| GDP per capita growth | 2.5 | 2.9 | 2.5 | 1.9 | (0.9) | 4.3 | 2.8 | 1.5 | 2.3 | 2.2 | ||||||||||||
| Current account balance/GDP | 6.5 | 4.6 | 4.5 | 3.6 | 4.6 | 4.9 | 3.0 | 1.5 | 1.5 | 2.3 | ||||||||||||
| Gross external financing needs/CAR&FXR | 68.2 | 72.4 | 73.4 | 75.0 | 73.0 | 76.8 | 80.6 | 81.7 | 83.9 | 85.0 | ||||||||||||
| Narrow net external debt/CAR | (47.0) | (49.5) | (45.7) | (50.5) | (51.2) | (35.0) | (33.5) | (31.5) | (25.6) | (21.7) | ||||||||||||
| GG balance/GDP | 2.5 | 2.6 | 3.1 | 0.9 | (3.3) | (3.7) | (3.2) | (1.0) | 0.0 | 0.3 | ||||||||||||
| GG net debt/GDP | 9.2 | 6.5 | 6.4 | 3.4 | 4.2 | 7.5 | 10.2 | 10.6 | 10.1 | 9.3 | ||||||||||||
| CPI inflation | 1.0 | 1.9 | 1.5 | 0.4 | 0.5 | 2.5 | 5.2 | 3.9 | 2.5 | 2.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 147.6 | 147.5 | 151.7 | 158.8 | 172.7 | 178.4 | 177.2 | 177.3 | 177.8 | 178.4 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Malaysia (A-/Stable/A-2)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: Malaysia Outlook Revised To Stable From Negative; 'A-/A-2' Foreign Currency And 'A/A-1' Local Currency Ratings Affirmed (June 27, 2022)
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 3
- External assessment: 2
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 5
- Monetary assessment: 2
Outlook: Stable
The stable outlook reflects our expectations that Malaysia's steady growth momentum and strong external position will remain in place over the next two years. At the same time, we anticipate the policymaking environment will be supportive of restoring fiscal settings to a firmer footing.
Downside scenario
We may lower the ratings if economic growth suffers a prolonged downturn that lowers the trend growth in real GDP per capita to levels in line with that of peers. Downward rating pressure could also build if political stability in Malaysia deteriorates such that policymaking becomes materially less predictable.
Upside scenario
We may raise the ratings on Malaysia if fiscal outcomes outperform our forecasts. This would be shown from net debt stock falling below 60% of GDP or interest payments less than 10% of general government revenues.
Table 13
| Malaysia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 9.5 | 10.0 | 11.1 | 11.2 | 10.4 | 11.4 | 12.3 | 12.0 | 12.9 | 14.0 | ||||||||||||
| GDP growth | 4.5 | 5.8 | 4.8 | 4.4 | (5.5) | 3.1 | 8.9 | 3.2 | 4.7 | 4.5 | ||||||||||||
| GDP per capita growth | 3.0 | 4.5 | 3.7 | 4.0 | (5.7) | 2.9 | 7.7 | 2.1 | 3.6 | 3.4 | ||||||||||||
| Current account balance/GDP | 2.4 | 2.8 | 2.2 | 3.5 | 4.2 | 3.8 | 2.9 | 2.4 | 2.4 | 2.3 | ||||||||||||
| Gross external financing needs/CAR&FXR | 94.2 | 95.0 | 94.8 | 95.5 | 93.9 | 93.4 | 93.1 | 94.1 | 93.0 | 93.0 | ||||||||||||
| Narrow net external debt/CAR | 24.6 | 22.1 | 24.3 | 24.6 | 28.0 | 25.1 | 23.6 | 20.9 | 17.8 | 15.4 | ||||||||||||
| GG balance/GDP | (2.6) | (2.4) | (2.7) | (2.0) | (4.9) | (5.7) | (5.0) | (3.7) | (3.2) | (2.8) | ||||||||||||
| GG net debt/GDP | 47.3 | 55.1 | 65.4 | 66.4 | 77.3 | 70.3 | 66.5 | 68.9 | 68.7 | 67.7 | ||||||||||||
| CPI inflation | 2.1 | 3.9 | 0.9 | 0.7 | (1.1) | 2.5 | 3.3 | 2.6 | 2.4 | 2.4 | ||||||||||||
| Bank credit to resident private sector/GDP | 132.4 | 127.2 | 131.1 | 131.6 | 145.5 | 138.5 | 125.8 | 131.7 | 131.8 | 131.0 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Mongolia (B/Stable/B)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: Mongolia 'B' Ratings Affirmed; Outlook Stable, July 21, 2022
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 5
- External assessment: 6
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 4
Outlook: Stable
The stable outlook balances pandemic-related risks to Mongolia's commodity export and growth prospects against our expectation that the country's nascent economic recovery will become more entrenched over the next 12 months. This latter trend will lead to improvements in Mongolia's external, fiscal, and debt metrics.
Downside scenario
Downward pressure could emerge if the economic recovery is derailed, leading to a material degradation of Mongolia's fiscal and debt metrics.
Upside scenario
We could raise the rating on Mongolia if the economy outperforms our current projections such that we expect its long-term trend growth to be significantly stronger than sovereign peers of similar income levels. This would lead to fiscal, debt, or external metrics improving more rapidly than we expect. We could also raise the rating if we observe that Mongolia's institutional settings achieve material improvements, especially in the predictability of policymaking.
Table 14
| Mongolia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 3.6 | 3.6 | 4.1 | 4.3 | 4.0 | 4.6 | 4.9 | 5.3 | 6.0 | 6.8 | ||||||||||||
| GDP growth | 1.5 | 5.6 | 7.6 | 5.5 | (4.4) | 1.6 | 2.5 | 6.0 | 6.4 | 6.8 | ||||||||||||
| GDP per capita growth | (0.5) | 3.6 | 5.6 | 3.6 | (6.1) | 0.1 | 1.0 | 4.4 | 4.8 | 5.2 | ||||||||||||
| Current account balance/GDP | (6.3) | (10.1) | (16.8) | (15.2) | (5.0) | (13.4) | (14.4) | (10.4) | (9.1) | (7.5) | ||||||||||||
| Gross external financing needs/CAR&FXR | 146.2 | 149.4 | 130.6 | 123.6 | 104.9 | 117.2 | 123.7 | 137.1 | 137.7 | 132.6 | ||||||||||||
| Narrow net external debt/CAR | 252.1 | 223.3 | 181.0 | 166.0 | 183.5 | 164.1 | 166.8 | 153.8 | 138.2 | 121.8 | ||||||||||||
| GG balance/GDP | (15.3) | (3.8) | 2.6 | 1.3 | (9.4) | (3.0) | (1.0) | (2.8) | (2.5) | (2.5) | ||||||||||||
| GG net debt/GDP | 94.1 | 85.3 | 74.3 | 63.8 | 78.0 | 66.9 | 60.4 | 55.7 | 51.5 | 47.7 | ||||||||||||
| CPI inflation | 0.7 | 4.3 | 6.8 | 7.3 | 3.8 | 7.4 | 14.0 | 11.0 | 9.0 | 8.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 56.4 | 54.8 | 56.9 | 50.4 | 47.9 | 49.2 | 47.8 | 46.1 | 44.6 | 43.1 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
New Zealand (AA+/Stable/A-1+)
- Analyst: anthony.walker@spglobal.com
- Latest publication: New Zealand 'AA+/A-1+' Foreign Currency Ratings Affirmed; Outlook Stable, Sept. 14, 2022
Rating score snapshot:
- Institutional assessment: 1
- Economic assessment: 1
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 3
- Fiscal assessment – Debt burden: 3
- Monetary assessment: 1
Outlook: Stable
The stable outlook reflects our view of the flexibility within the current rating for the New Zealand government to address potential risks associated with high levels of external and private-sector debt, and elevated property prices.
Downside scenario
We could lower our ratings on New Zealand if the fiscal deficit does not narrow as we forecast and interest costs rise substantially to more than 10% of government revenues. We could also lower the rating if the country has persistently weak current account deficits (CAD) of more than 20% of current account receipts. This would reduce the government's headroom at the current rating to address potential macroeconomic and financial sector risks, should they materialize.
Upside scenario
We could raise our ratings on New Zealand if the general government deficits are consistently less than 3% of GDP and net general government debt or interest expenses are structurally less than 30% of GDP and 5% of government revenues respectively. These improvements could mitigate risks associated with the country's property market and financial system at a higher rating level.
Table 15
| New Zealand | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 36.9 | 41.1 | 43.4 | 42.0 | 40.1 | 46.5 | 47.7 | 45.3 | 47.9 | 51.2 | ||||||||||||
| GDP growth | 3.8 | 3.6 | 3.6 | 3.1 | (1.1) | 5.2 | 1.0 | 3.2 | 0.6 | 2.4 | ||||||||||||
| GDP per capita growth | 1.6 | 1.3 | 1.7 | 1.4 | (3.1) | 4.2 | 0.8 | 2.2 | (0.3) | 1.1 | ||||||||||||
| Current account balance/GDP | (2.1) | (2.5) | (3.5) | (3.5) | (1.5) | (3.4) | (7.7) | (5.8) | (5.5) | (5.2) | ||||||||||||
| Gross external financing needs/CAR&FXR | 192.5 | 193.6 | 180.0 | 166.6 | 171.2 | 178.2 | 217.1 | 187.6 | 196.5 | 196.4 | ||||||||||||
| Narrow net external debt/CAR | 187.5 | 180.2 | 159.1 | 161.4 | 169.0 | 201.3 | 181.2 | 176.0 | 176.7 | 169.8 | ||||||||||||
| GG balance/GDP | (0.7) | 0.8 | 0.3 | (0.4) | (7.9) | (3.7) | (7.3) | (4.5) | (3.3) | (1.6) | ||||||||||||
| GG net debt/GDP | 24.9 | 21.5 | 17.8 | 15.7 | 24.0 | 20.4 | 27.3 | 29.4 | 30.9 | 30.6 | ||||||||||||
| CPI inflation | 0.3 | 1.4 | 1.5 | 1.7 | 1.8 | 1.9 | 6.3 | 6.6 | 4.1 | 2.9 | ||||||||||||
| Bank credit to resident private sector/GDP | 160.4 | 160.6 | 157.5 | 158.4 | 165.0 | 160.5 | 159.5 | 157.3 | 159.7 | 160.6 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Pakistan (CCC+/Stable/C)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Pakistan Downgraded To 'CCC+/C' On Enduring External, Economic, Fiscal Risks; Outlook Stable, Dec. 22, 2022
Rating score snapshot:
- Institutional assessment: 6
- Economic assessment: 5
- External assessment: 6
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 4
Outlook: Stable
The stable outlook reflects the balance of further risks to Pakistan's external liquidity position and fiscal performance over the next 12 months against the prospect of additional support from multilateral and bilateral partners.
Downside scenario
We could lower our ratings if Pakistan's external indicators deteriorate rapidly or fiscal deficits widen to exceed the domestic banking system's financing capacity. One potential indication of domestic financing stress would be further increases in the government's interest burden, which we estimate will exceed 40% of government revenues in 2023.
Upside scenario
Conversely, we may raise our ratings if Pakistan's external and fiscal positions improve materially from current levels. Evidence of improvement could include a sustained rise in foreign exchange reserves, as well as a stabilization of Pakistan's debt service costs relative to revenues and a lengthening of debt maturities.
Table 16
| Pakistan | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 1.6 | 1.7 | 1.7 | 1.5 | 1.4 | 1.6 | 1.6 | 1.5 | 1.5 | 1.5 | ||||||||||||
| GDP growth | 5.5 | 5.6 | 6.1 | 3.1 | (0.9) | 5.7 | 6.0 | 2.0 | 2.5 | 3.0 | ||||||||||||
| GDP per capita growth | 3.4 | (0.1) | 3.6 | 1.2 | (2.8) | 3.4 | 3.6 | (0.3) | 0.2 | 0.7 | ||||||||||||
| Current account balance/GDP | (1.6) | (3.6) | (5.4) | (4.2) | (1.5) | (0.8) | (4.7) | (3.3) | (2.7) | (2.5) | ||||||||||||
| Gross external financing needs/CAR&FXR | 105.7 | 112.4 | 131.3 | 145.4 | 137.8 | 116.7 | 124.1 | 133.7 | 138.2 | 138.4 | ||||||||||||
| Narrow net external debt/CAR | 90.2 | 108.5 | 135.8 | 158.8 | 163.7 | 142.0 | 151.8 | 175.1 | 183.7 | 187.3 | ||||||||||||
| GG balance/GDP | (4.1) | (5.2) | (5.8) | (7.9) | (7.1) | (6.1) | (7.9) | (6.5) | (5.8) | (5.0) | ||||||||||||
| GG net debt/GDP | 54.1 | 54.8 | 58.2 | 69.1 | 70.8 | 65.6 | 68.1 | 69.5 | 71.8 | 71.8 | ||||||||||||
| CPI inflation | 2.9 | 4.2 | 3.9 | 7.3 | 11.7 | 8.9 | 12.2 | 22.0 | 12.0 | 9.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 16.0 | 17.6 | 18.7 | 19.0 | 18.1 | 16.6 | 15.2 | 14.5 | 14.9 | 15.0 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Papua New Guinea (B-/Stable/B)
- Analyst: rebecca.hrvatin@spglobal.com
- Latest publication: Papua New Guinea Outlook Revised To Stable From Negative On Improving Commodity Exports; 'B-/B' Ratings Affirmed (May 24, 2022)
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 6
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 5
Outlook: Stable
The stable outlook reflects our assumptions that fiscal consolidation efforts and policies included in an International Monetary Fund program will continue over the next year. This will help to narrow fiscal deficits and stabilize Papua New Guinea's debt burden.
Downside scenario
We could lower our ratings over the next 12 months if consolidation efforts do not appear to be taking place, raising concerns among investors about the country's rapidly rising debt levels and debt serviceability.
Upside scenario
We could raise our ratings if there were a strong track record of implementing fiscal reforms, thereby improving our view of PNG's fiscal and debt metrics, as well as a strong improvement in GDP growth. This is unlikely to occur over the next 12 months.
Table 17
| Papua New Guinea | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 2.5 | 2.7 | 2.8 | 2.8 | 2.8 | 2.9 | 3.1 | 3.2 | 3.4 | 3.5 | ||||||||||||
| GDP growth | 5.5 | 3.5 | (0.3) | 4.5 | (3.5) | 1.5 | 4.8 | 4.3 | 3.0 | 3.0 | ||||||||||||
| GDP per capita growth | 3.4 | 1.5 | (2.2) | 2.5 | (5.3) | (0.6) | 2.6 | 2.2 | 0.9 | 0.9 | ||||||||||||
| Current account balance/GDP | 24.9 | 23.5 | 22.6 | 22.9 | 20.9 | 20.3 | 22.6 | 21.4 | 20.8 | 20.1 | ||||||||||||
| Gross external financing needs/CAR&FXR | 72.5 | 98.6 | 81.9 | 81.5 | 80.2 | 67.0 | 67.1 | 69.6 | 70.1 | 67.6 | ||||||||||||
| Narrow net external debt/CAR | 177.9 | 133.7 | 122.3 | 97.6 | 125.8 | 128.7 | 109.9 | 108.0 | 107.6 | 100.4 | ||||||||||||
| GG balance/GDP | (4.7) | (2.5) | (2.6) | (5.0) | (8.6) | (6.7) | (6.0) | (4.8) | (3.8) | (2.6) | ||||||||||||
| GG net debt/GDP | 29.5 | 29.5 | 27.6 | 36.4 | 42.3 | 46.0 | 48.2 | 49.5 | 50.4 | 50.1 | ||||||||||||
| CPI inflation | 6.7 | 5.4 | 4.4 | 3.9 | 4.9 | 4.5 | 5.6 | 4.7 | 4.5 | 4.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 21.3 | 18.9 | 18.3 | 18.2 | 18.1 | 16.2 | 15.0 | 14.3 | 13.9 | 13.5 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Philippines (BBB+/Stable/A-2)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: Philippines 'BBB+/A-2' Ratings Affirmed; Outlook Stable, Nov. 16, 2022
Rating score snapshot:
- Institutional assessment: 4
- Economic assessment: 4
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 3
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 3
Outlook: Stable
The stable outlook reflects our expectation that the Philippine economy will maintain healthy growth rates and its fiscal performance will materially improve over the next 24 months.
Downside scenario
We may lower the ratings if the Philippines' economic recovery falters, leading to a significant erosion of the country's long-term trend growth, or an associated deterioration of the government's fiscal and debt positions beyond our projections.
Indications of downward pressure on the ratings would be a sustained annual change in the net general government debt that is higher than 4% of GDP and the general government net debt stock exceeding 60% of GDP, or interest payments exceeding 15% of revenue on a sustained basis.
Persistently large current account deficits leading to a structural weakening of the Philippines' external balance sheet would also indicate further downward pressure on the ratings.
Upside scenario
We may raise the ratings if the economy recovers much faster than we expect, and the government achieves more rapid fiscal consolidation. We may also raise the ratings if institutional settings, which contributed to a significant enhancement in the Philippines' pre-pandemic credit metrics over the past decade, further improve.
Table 18
| Philippines | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 3.1 | 3.2 | 3.3 | 3.5 | 3.3 | 3.6 | 3.6 | 3.7 | 4.1 | 4.7 | ||||||||||||
| GDP growth | 7.2 | 6.9 | 6.3 | 6.1 | (9.5) | 5.7 | 7.1 | 5.2 | 6.6 | 6.3 | ||||||||||||
| GDP per capita growth | 5.4 | 5.3 | 4.8 | 4.6 | (10.8) | 4.3 | 5.5 | 3.6 | 5.0 | 4.8 | ||||||||||||
| Current account balance/GDP | (0.4) | (0.7) | (2.6) | (0.8) | 3.2 | (1.5) | (5.0) | (3.4) | (2.9) | (1.7) | ||||||||||||
| Gross external financing needs/CAR&FXR | 68.0 | 70.5 | 74.1 | 74.0 | 61.8 | 64.9 | 73.3 | 76.7 | 78.3 | 78.4 | ||||||||||||
| Narrow net external debt/CAR | (25.4) | (25.1) | (18.6) | (24.9) | (36.2) | (27.3) | (12.3) | (9.5) | (7.7) | (8.2) | ||||||||||||
| GG balance/GDP | (0.6) | (0.5) | (1.3) | (1.5) | (5.7) | (6.0) | (5.0) | (3.8) | (3.2) | (2.7) | ||||||||||||
| GG net debt/GDP | 27.5 | 27.9 | 28.0 | 28.9 | 38.1 | 42.7 | 42.8 | 43.0 | 42.4 | 40.7 | ||||||||||||
| CPI inflation | 1.3 | 2.9 | 5.2 | 2.4 | 2.4 | 3.9 | 5.5 | 4.3 | 2.7 | 2.7 | ||||||||||||
| Bank credit to resident private sector/GDP | 49.7 | 52.9 | 55.0 | 55.6 | 59.9 | 57.7 | 54.7 | 53.6 | 52.2 | 50.1 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Singapore (AAA/Stable/A-1+)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: (Full Analysis) Republic of Singapore (May 9, 2022)
Rating score snapshot:
- Institutional assessment: 1
- Economic assessment: 1
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 1
- Fiscal assessment – Debt burden: 1
- Monetary assessment: 1
Outlook: Stable
The stable outlook reflects our expectation that the Singapore economy's ongoing recovery is likely to gain traction on the back of wide vaccination rollout and easing of distancing measures. Despite the unprecedented economic shock, Singapore's strong economic fundamentals, fiscal, and external settings have remained intact.
Downside scenario
The ratings could come under pressure if the ongoing economic recovery falters, leading to a material shift in Singapore's credit metrics and a deterioration of the policy environment. However, in our view, Singapore's deep fiscal resources and its strong institutions should be able to address such temporary shocks and mitigate structural damage to the economy. Therefore, we consider a downgrade in the next two years as improbable.
Table 20
| Singapore | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 56.9 | 61.2 | 66.9 | 65.8 | 60.7 | 72.8 | 76.7 | 79.6 | 83.7 | 88.7 | ||||||||||||
| GDP growth | 3.6 | 4.7 | 3.7 | 1.1 | (4.1) | 7.6 | 3.6 | 2.3 | 3.0 | 3.0 | ||||||||||||
| GDP per capita growth | 2.2 | 4.6 | 3.2 | (0.1) | (3.8) | 12.2 | 3.0 | 1.6 | 2.4 | 2.4 | ||||||||||||
| Current account balance/GDP | 17.7 | 17.3 | 15.2 | 14.5 | 16.8 | 18.1 | 20.2 | 19.7 | 19.2 | 19.8 | ||||||||||||
| Gross external financing needs/CAR&FXR | 161.8 | 156.0 | 154.8 | 157.9 | 163.5 | 149.4 | 142.4 | 142.8 | 143.8 | 144.3 | ||||||||||||
| Narrow net external debt/CAR | (68.9) | (75.9) | (66.0) | (70.0) | (90.0) | (86.4) | (77.3) | (75.0) | (71.4) | (68.8) | ||||||||||||
| GG balance/GDP | 4.1 | 7.7 | 4.5 | 7.1 | (13.9) | 0.5 | (0.2) | 1.0 | 1.2 | 1.5 | ||||||||||||
| GG net debt/GDP | (67.9) | (59.9) | (56.2) | (52.7) | (49.6) | (47.4) | (49.3) | (52.3) | (54.0) | (47.6) | ||||||||||||
| CPI inflation | (0.5) | 0.6 | 0.4 | 0.6 | (0.2) | 2.3 | 6.2 | 3.8 | 2.4 | 2.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 123.8 | 121.0 | 117.8 | 119.7 | 130.6 | 120.2 | 113.0 | 113.6 | 110.8 | 107.4 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Sri Lanka (SD/--/SD)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Sri Lanka Bonds Downgraded To 'D' After Missed Payments; Sovereign Ratings Affirmed, Nov. 3, 2022
Rating score snapshot:
- Institutional assessment: 6
- Economic assessment: 6
- External assessment: 6
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 4
Outlook:
Our foreign currency rating on Sri Lanka is 'SD' (selective default). We do not assign outlooks to 'SD' ratings because they express a condition and not a forward-looking opinion of default probability.
The negative outlook on the local currency rating reflects a high risk to commercial debt repayments over the next 12 months in the context of Sri Lanka's economic, external, and fiscal pressures.
Downside scenario
We could lower the local currency ratings if there are indications of nonpayment or restructuring of Sri Lankan rupee-denominated obligations.
Upside scenario
We could revise the outlook to stable or raise the local currency ratings if we perceive that the likelihood of the government's local currency debt being excluded from any debt restructuring has increased. This could be the case if, for example, the government receives significant donor funding, which gives it some time to implement immediate and transformative reforms.
We could raise our long-term foreign currency sovereign credit rating upon completion of the government's bond restructuring. The rating would reflect Sri Lanka's post-restructuring creditworthiness. Our post-restructuring ratings tend to be in the 'CCC' or low 'B' categories, depending on the sovereign's new debt structure and capacity to support that debt.
Table 19
| Sri Lanka | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 4.2 | 4.4 | 4.4 | 4.1 | 3.9 | 4.0 | 2.8 | 2.3 | 2.4 | 2.6 | ||||||||||||
| GDP growth | 5.1 | 6.5 | 2.3 | (0.2) | (3.5) | 3.3 | (8.7) | (3.0) | 1.5 | 2.6 | ||||||||||||
| GDP per capita growth | 3.9 | 5.3 | 1.2 | (0.8) | (4.0) | 2.2 | (9.3) | (3.7) | 0.8 | 1.9 | ||||||||||||
| Current account balance/GDP | (2.0) | (2.5) | (3.0) | (2.1) | (1.4) | (3.8) | (3.3) | (2.0) | (1.9) | (1.8) | ||||||||||||
| Gross external financing needs/CAR&FXR | 120.7 | 128.2 | 120.5 | 123.5 | 119.9 | 136.4 | 154.5 | 162.2 | 155.7 | 151.0 | ||||||||||||
| Narrow net external debt/CAR | 139.5 | 141.0 | 137.5 | 148.1 | 171.4 | 184.6 | 207.0 | 203.3 | 195.5 | 187.8 | ||||||||||||
| GG balance/GDP | (5.0) | (5.1) | (5.0) | (9.0) | (10.5) | (11.6) | (11.0) | (9.0) | (8.7) | (8.4) | ||||||||||||
| GG net debt/GDP | 73.5 | 71.6 | 77.6 | 81.2 | 94.7 | 100.2 | 135.7 | 141.6 | 138.6 | 137.6 | ||||||||||||
| CPI inflation | 4.2 | 7.3 | 0.4 | 6.2 | 4.6 | 14.0 | 65.0 | 25.0 | 12.0 | 8.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 37.0 | 38.2 | 41.2 | 41.9 | 45.9 | 48.4 | 53.2 | 56.0 | 57.0 | 59.1 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Taiwan (AA+/Stable/A-1+)
- Analyst: rain.yin@spglobal.com
- Latest publication: Taiwan Ratings Raised To 'AA+/A-1+' On Strong Economic Performance; Outlook Stable (April 29, 2022)
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 1
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 2
- Fiscal assessment – Debt burden: 2
- Monetary assessment: 2
Outlook: Stable
The stable outlook reflects our expectation that over the next 24 months, risks to the ratings remain fairly balanced. Structural demand for Taiwan's semiconductor exports is likely to offset growth issues associated with longstanding geopolitical tensions.
Downside scenario
We may lower the ratings if Taiwan's economic growth slows sharply and persistently. We may also lower the ratings if cross-strait relations deteriorate abruptly, resulting in heightened geopolitical risks and serious adverse effects on the economy and fiscal position.
Upside scenario
We could raise the ratings if cross-strait tensions ease materially, reducing the risks to Taiwan's credit metrics.
Table 21
| Taiwan | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 23.1 | 25.1 | 25.8 | 25.9 | 28.6 | 33.2 | 32.4 | 32.0 | 34.0 | 36.0 | ||||||||||||
| GDP growth | 2.2 | 3.3 | 2.8 | 3.1 | 3.4 | 6.5 | 2.2 | 1.5 | 2.5 | 2.6 | ||||||||||||
| GDP per capita growth | 2.0 | 3.2 | 2.7 | 3.0 | 3.6 | 7.4 | 2.4 | 1.7 | 2.7 | 2.8 | ||||||||||||
| Current account balance/GDP | 13.1 | 14.1 | 11.6 | 10.6 | 14.1 | 14.7 | 10.0 | 9.8 | 9.8 | 10.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 59.1 | 60.6 | 62.8 | 63.6 | 58.7 | 59.0 | 64.6 | 62.7 | 63.7 | 64.5 | ||||||||||||
| Narrow net external debt/CAR | (116.5) | (109.3) | (101.1) | (114.6) | (131.2) | (104.9) | (88.5) | (89.4) | (83.5) | (77.0) | ||||||||||||
| GG balance/GDP | (0.3) | (0.1) | 0.0 | 0.1 | (1.0) | (0.2) | (1.5) | (1.6) | (1.3) | (1.1) | ||||||||||||
| GG net debt/GDP | 36.3 | 34.7 | 33.5 | 31.9 | 31.4 | 29.1 | 31.1 | 31.5 | 31.4 | 31.2 | ||||||||||||
| CPI inflation | 1.4 | 0.6 | 1.4 | 0.6 | (0.2) | 2.0 | 3.1 | 2.6 | 1.1 | 0.8 | ||||||||||||
| Bank credit to resident private sector/GDP | 146.8 | 151.8 | 156.7 | 161.0 | 164.8 | 165.1 | 164.5 | 166.3 | 166.9 | 167.7 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Thailand (BBB+/Stable/A-2)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Thailand 'BBB+/A-2' Ratings Affirmed As Economic Recovery Takes Shape; Outlook Stable, Nov. 23, 2022
Rating score snapshot:
- Institutional assessment: 4
- Economic assessment: 4
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 3
- Fiscal assessment – Debt burden: 3
- Monetary assessment: 2
Outlook: Stable
The stable outlook on Thailand reflects our view that the country's economic recovery will accelerate in the next 12-24 months following the normalization of pandemic-era restrictions. We envisage that Thailand's political uncertainty, which has become a key rating constraint over the past 15 years, will remain elevated over this period but will not worsen markedly to cause further social disruptions.
Downside scenario
We may lower the ratings if Thailand's future economic growth is persistently weaker than what we currently forecast. This could increase the pressure on the current policymaking process and raise the likelihood of abrupt political changes that may be detrimental to our institutional assessment on Thailand.
Upside scenario
We may consider raising the ratings if the political situation stabilizes and if we assess that incentives for abrupt political changes are reduced.
Table 22
| Thailand | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 6.0 | 6.6 | 7.3 | 7.8 | 7.2 | 7.2 | 7.1 | 7.4 | 8.0 | 8.7 | ||||||||||||
| GDP growth | 3.4 | 4.2 | 4.2 | 2.2 | (6.2) | 1.5 | 2.9 | 3.5 | 3.5 | 3.1 | ||||||||||||
| GDP per capita growth | 3.1 | 3.8 | 3.9 | 1.9 | (6.4) | 1.2 | 2.8 | 3.4 | 3.4 | 3.0 | ||||||||||||
| Current account balance/GDP | 10.5 | 9.6 | 5.6 | 7.0 | 4.2 | (2.0) | (0.8) | 1.6 | 2.4 | 3.1 | ||||||||||||
| Gross external financing needs/CAR&FXR | 68.7 | 66.9 | 68.7 | 66.4 | 62.8 | 70.3 | 71.8 | 74.4 | 74.8 | 75.1 | ||||||||||||
| Narrow net external debt/CAR | (25.4) | (26.9) | (25.6) | (28.8) | (40.4) | (29.4) | (20.3) | (18.7) | (17.4) | (16.8) | ||||||||||||
| GG balance/GDP | 1.3 | 0.8 | 1.1 | 0.2 | (3.4) | (5.7) | (3.5) | (3.2) | (2.9) | (2.9) | ||||||||||||
| GG net debt/GDP | 17.6 | 19.7 | 19.7 | 19.8 | 28.6 | 37.3 | 40.1 | 41.3 | 41.8 | 42.8 | ||||||||||||
| CPI inflation | 0.2 | 0.7 | 1.1 | 0.7 | (0.9) | 1.2 | 6.4 | 3.1 | 1.1 | 0.7 | ||||||||||||
| Bank credit to resident private sector/GDP | 115.7 | 114.1 | 114.2 | 113.5 | 128.2 | 129.7 | 126.6 | 124.1 | 122.9 | 123.2 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
Vietnam (BB+/Stable/B)
- Analyst: rain.yin@spglobal.com
- Latest publication: Vietnam Upgraded To 'BB+/B' On Improved Governance On Guaranteed Debt; Outlook Stable (May 26, 2022)
Rating score snapshot:
- Institutional assessment: 4
- Economic assessment: 4
- External assessment: 3
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 4
Outlook: Stable
The stable outlook reflects our expectations that, over the next 12-24 months, Vietnam's economy will continue to recover from the challenges posed by the pandemic over the past two years. This will support the external position and rein in fiscal deficits.
Downside scenario
We may lower the ratings if economic conditions deteriorate rapidly or considerable stress in the country's banking system emerges to weaken the government's fiscal position seriously, pushing interest payments above 10% of general government revenues.
Upside scenario
We may raise our ratings if Vietnam's institutional settings improve considerably, in ways that augment policy predictability and transparency. Such favorable changes in the policy environment could bolster investor confidence in the country's economic and financial stability.
Table 23
| Vietnam | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022e | 2023e | 2024e | 2025e | |||||||||||||
| GDP per capita (in ‘000) | 2.8 | 3.0 | 3.3 | 3.5 | 3.6 | 3.7 | 4.0 | 4.4 | 4.8 | 5.3 | ||||||||||||
| GDP growth | 37.2 | 6.9 | 7.5 | 7.4 | 2.9 | 2.6 | 8.3 | 6.3 | 6.9 | 6.7 | ||||||||||||
| GDP per capita growth | 35.7 | 5.8 | 6.3 | 5.3 | 1.7 | 1.6 | 7.2 | 5.3 | 5.8 | 5.6 | ||||||||||||
| Current account balance/GDP | 0.2 | (0.6) | 1.9 | 3.9 | 4.3 | (1.0) | 0.4 | 0.7 | 0.9 | 1.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 98.1 | 97.3 | 93.1 | 90.4 | 85.9 | 89.0 | 104.5 | 86.8 | 85.0 | 83.2 | ||||||||||||
| Narrow net external debt/CAR | 37.8 | 34.4 | 29.0 | 23.2 | 18.1 | 18.6 | 16.0 | 12.9 | 9.6 | 6.5 | ||||||||||||
| GG balance/GDP | (3.2) | (2.0) | (1.0) | (0.4) | (2.9) | (3.4) | (4.8) | (4.1) | (3.6) | (3.5) | ||||||||||||
| GG net debt/GDP | 41.3 | 37.1 | 33.6 | 30.6 | 32.2 | 31.9 | 32.8 | 33.8 | 33.9 | 34.0 | ||||||||||||
| CPI inflation | 2.7 | 3.5 | 3.5 | 2.8 | 3.2 | 1.8 | 3.1 | 3.3 | 3.1 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 98.9 | 104.0 | 105.3 | 108.0 | 115.5 | 124.4 | 123.6 | 127.7 | 131.0 | 134.5 | ||||||||||||
| Note: A free and interactive version of a larger number of sovereign risk indicators can be found at spratings.com/sri. e--Estimate. CAR--Current account receipts. FXR--Foreign exchange reserves. GG--General government. CPI--Consumer price index. Source: S&P Global Ratings. | ||||||||||||||||||||||
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Editor: Lex Hall
| Primary Credit Analyst: | KimEng Tan, Singapore + 65 6239 6350; kimeng.tan@spglobal.com |
| Secondary Contacts: | Andrew Wood, Singapore + 65 6239 6315; andrew.wood@spglobal.com |
| YeeFarn Phua, Singapore + 65 6239 6341; yeefarn.phua@spglobal.com | |
| Anthony Walker, Melbourne + 61 3 9631 2019; anthony.walker@spglobal.com | |
| Martin J Foo, Melbourne + 61 3 9631 2016; martin.foo@spglobal.com | |
| Rain Yin, Singapore + (65) 6239 6342; rain.yin@spglobal.com | |
| Rebecca Hrvatin, Melbourne + 61 3 9631 2123; rebecca.hrvatin@spglobal.com |
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