This report does not constitute a rating action.
Key Takeaways
- Of the 21 sovereign ratings in Asia-Pacific, 19 have stable outlooks.
- We expect economic and financial conditions to allow us to maintain ratings on most sovereigns in Asia-Pacific in the next one to two years.
- A deterioration in the Russia-Ukraine war or the conflict in the Middle East likely poses the most risk to stable sovereign outlooks in Asia-Pacific.
Rating Outlook And Trends
Wars and elections. Changes in the geopolitical landscape pose the greatest risk to what has been a steady year in Asia-Pacific. We may end 2023 with just one foreign-currency sovereign rating action in the region. S&P Global Ratings revised the outlook on Bangladesh to negative, from stable, in July 2023. The country's trade deficit continued to be relatively high in the first three quarters of 2023, after a large shortfall in 2022. These weakened external metrics added downward pressure on sovereign credit support.
Sri Lanka defaulted on its local currency debts in September this year as it restructured some of its local currency bonds. Upon the completion of the debt exchange, we raised the local currency long-term sovereign rating to 'CCC+', with a stable rating and affirmed the 'C' short-term rating. The foreign currency ratings remained 'SD' as at mid-December, although the country has made progress in its effort to restructure its external debts.
Chart 1
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. In July 2023, it edged lower again as we revised the outlook on Bangladesh to negative (see chart 3).
Chart 2
The stable outlooks on practically all long-term foreign-currency sovereign ratings in the region (19 out of 21 ratings in Asia-Pacific) suggest there will be few, if any, changes in the next year or so. We expect economic and financial conditions to allow us to maintain ratings on most sovereigns in the Asia-Pacific in the next one to two years. There is no outlook on Sri Lanka because it is in default.
Economic growth in 2024 is unlikely to be as strong as 2023 but will remain resilient in most cases. Exports should pick up after a weak year in 2023, while international travel should continue to recover. Moreover, lower energy prices and expectations that interest rates have likely peaked mean that the strain on external metrics should pose less risk to sovereign credit.
Chart 3
Easing external pressures balance slower growth
The widely held expectation among analysts and manufacturers of an improvement of electronics demand in 2024 is positive for East Asian government metrics. The electronics downcycle this year has weighed on the growth of several economies, including China, Japan, Korea, Singapore, Taiwan, and Vietnam. Exports out of these regions have contracted through much of 2023. In Korea, Singapore, Taiwan, and Vietnam, many analysts see a recovery in exports, which should help to lift real GDP growth in 2024 above rates that we estimate for 2023.
Overall growth in the Asia-Pacific, however, is likely to slow next year. Domestic demand in major economies will likely expand at slower rates in 2024. The relative strength of consumer demand in many parts of the region this year stemmed mainly from the rebound in spending following the removal of pandemic-related restrictions. This momentum has slowed, and spending growth will likely moderate toward more normal levels in the year ahead.
Growth of Asian emerging and developing economies will still be a credit strength for many governments in the region. By the IMF's projections, these economies make up the fastest growing regional bloc for which the fund publishes forecasts. We continue to consider several governments in the region to be in economies that are outperformers in terms of trend growth.
On top of the expected export recovery, pressures on external metrics should also ease if recent trends persist into 2024. Until mid-December, global energy prices have remained relatively stable despite the uncertainties of war in Ukraine and the Middle East. If this remains the case for the next year or so, current account balances in energy-importing economies in this region should continue to improve.
At the same time, the view among economists that interest rates in major advanced economies have peaked has also eased the strain on Asian exchange rates. This has softened inflationary pressures and reduced the declines in foreign exchange reserves for some sovereigns. If stable or declining interest rates continue to remain the consensus expectation among forecasters, some sovereigns may have the chance to repair their weakened external metrics.
Falling inflation and firmer exchange rates should also help fiscal deficits to narrow further in 2024. The receding impact of the pandemic helped many governments to report better budget deficits this year. However, high inflation has forced some governments to spend on measures to cushion the effect of higher prices on their population. Interest payments in local currency terms also rose for governments with significant foreign currency debts when their exchange rates weakened. Otherwise, budgetary shortfalls would have been smaller.
In the case of China, prospects of better future fiscal performance are particularly important. The pandemic and the troubles in the country's real estate sector have materially weakened public finances over the past two to three years. We believe that this deterioration would reverse, at least in part, as the economy recovers in the next year or so.
However, the Chinese economy has struggled to find its footing as real estate sector activities remain weak and external pressures constrain exports and investment. Instead of embarking on fiscal repair, the government has had to increase borrowing to prevent growth from slipping too far. If sluggish economic momentum continues to prevent the government from meaningfully improving its fiscal performance, the fiscal repair that we expect will keep the credit metrics of China at the current 'A+' rating level may not come in the next couple of years.
Geopolitical risks to regional sovereign creditworthiness remain
A worsening of the conflict in Ukraine or that of the Middle East likely poses the most risk to stable sovereign outlooks in the Asia-Pacific. By affecting volatility in the commodity and financial markets, such a development could renew the burden on external and fiscal metrics on regional sovereigns. With many elections coming up in parts of the Asia-Pacific, governments may be distracted. They may also be more likely to shield their populations from the impact of higher prices, even at the cost of deteriorating credit metrics. If these strains persist, rating outlooks could become more negative.
Worsening U.S.-China tensions is another risk. The relationship between the two countries has stabilized in recent months. Nevertheless, with the next U.S. presidential election less than a year away, new bilateral frictions may grow into bigger disagreements. And accidental contact between the countries' armed forces in the Pacific has a higher chance of causing political and economic damage. This could in turn affect regional sovereign credit metrics.
Table 1
| Asian-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 | 1 | 1§ | 1 | |||||||||
| Bangladesh | BB-/Negative/B | 5 | 4 | 3 | 6 | 5 | 4 | |||||||||
| China | A+/Stable/A-1 | 3 | 3 | 1 | 4 | 4 | 3 | |||||||||
| Cook Islands | B+/Stable/B | 5 | 4 | 5 | 4 | 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 | 6 | 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/NM/SD | 6 | 6 | 6 | 6 | 6 | 5 | |||||||||
| 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 | 19.0 | 14.3 | 14.3 | ||||||||||
| 2 (%) | 4.8 | 4.8 | 4.8 | 4.8 | 9.5 | 28.6 | ||||||||||
| 3 (%) | 33.3 | 9.5 | 19.0 | 19.0 | 9.5 | 19.0 | ||||||||||
| 4 (%) | 14.3 | 33.3 | 0.0 | 28.6 | 28.6 | 19.0 | ||||||||||
| 5 (%) | 23.8 | 14.3 | 14.3 | 0.0 | 9.5 | 14.3 | ||||||||||
| 6 (%) | 9.5 | 9.5 | 19.0 | 28.6 | 28.6 | 4.8 | ||||||||||
| Median | 3.0 | 4.0 | 3.0 | 4.0 | 4.0 | 3.0 | ||||||||||
| Mean | 3.6 | 3.3 | 3.0 | 3.7 | 4.1 | 3.0 | ||||||||||
| Standard Deviation | 1.5 | 1.7 | 2.1 | 1.8 | 1.7 | 1.5 | ||||||||||
| *Deterioration since June 2023. §Improvement since June 2023 | ||||||||||||||||
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 (%) | ||||||||||||||||||
| 2023A | 2024A | 2023A | 2024A | 2023A | 2024A | 2023A | 2024A | 2023A | 2024A | |||||||||||||
| Australia | 3.3 | 1.2 | -0.3 | -1.5 | 26.7 | 26.1 | 1.2 | 0.5 | 189.5 | 199.5 | ||||||||||||
| Bangladesh | 5.5 | 6.0 | -5.4 | -5.0 | 31.4 | 33.1 | -1.0 | -0.8 | 70.4 | 69.3 | ||||||||||||
| China | 4.8 | 4.4 | -3.0 | -3.0 | 47.9 | 47.9 | 2.1 | 2.2 | -63.5 | -65.0 | ||||||||||||
| Cook Islands | 11.6 | 6.8 | -4.3 | -2.3 | 33.0 | 31.4 | 15.7 | 19.3 | -26.2 | -23.9 | ||||||||||||
| Fiji | 6.4 | 3.8 | -6.5 | -5.0 | 73.1 | 73.9 | -14.2 | -9.7 | 37.6 | 43.2 | ||||||||||||
| Hong Kong | 3.3 | 2.6 | -2.5 | -0.3 | -21.6 | -20.3 | 8.0 | 7.6 | -66.9 | -61.7 | ||||||||||||
| India | 6.4 | 6.4 | -8.9 | -8.1 | 85.0 | 85.1 | 0.1 | -0.9 | -3.1 | -1.7 | ||||||||||||
| Indonesia | 5.0 | 4.9 | -2.1 | -2.3 | 36.1 | 36.0 | -0.1 | -0.6 | 73.5 | 69.7 | ||||||||||||
| Japan | 1.6 | 0.9 | -8.0 | -5.2 | 158.7 | 160.5 | 2.8 | 2.8 | -45.3 | -44.3 | ||||||||||||
| Korea | 1.2 | 2.2 | -0.8 | 0.0 | 10.7 | 10.2 | 0.6 | 1.6 | -20.2 | -15.1 | ||||||||||||
| Malaysia | 4.0 | 4.5 | -4.7 | -4.0 | 67.4 | 66.6 | 3.5 | 4.5 | 21.2 | 17.3 | ||||||||||||
| Mongolia | 5.5 | 6.0 | -2.6 | -2.5 | 55.7 | 43.6 | -12.6 | -10.3 | 120.2 | 100.4 | ||||||||||||
| New Zealand | 3.2 | 1.1 | -5.2 | -5.0 | 29.8 | 32.9 | -7.5 | -6.5 | 182.9 | 203.6 | ||||||||||||
| Pakistan | 0.3 | 3.0 | -7.7 | -7.5 | 70.2 | 65.9 | -0.7 | -0.5 | 165.0 | 159.5 | ||||||||||||
| Papua New Guinea | 3.7 | 4.4 | -4.5 | -4.1 | 45.3 | 46.7 | 15.0 | 14.7 | 107.7 | 120.5 | ||||||||||||
| Philippines | 5.4 | 5.9 | -3.8 | -3.2 | 44.3 | 43.8 | -2.8 | -2.3 | -9.6 | -7.2 | ||||||||||||
| Singapore | 1.1 | 2.6 | 2.0 | 1.5 | -28.1 | -30.2 | 15.9 | 15.9 | -81.2 | -89.7 | ||||||||||||
| Sri Lanka | -2.0 | 2.0 | -8.4 | -8.0 | 110.0 | 111.1 | 0.3 | -0.8 | 181.0 | 162.8 | ||||||||||||
| Taiwan | 1.2 | 3.0 | -1.5 | -1.5 | 28.1 | 28.0 | 12.8 | 12.4 | -117.3 | -115.6 | ||||||||||||
| Thailand | 2.5 | 4.2 | -2.0 | -2.2 | 40.6 | 42.8 | 1.2 | 2.1 | -19.0 | -18.3 | ||||||||||||
| Vietnam | 4.6 | 6.5 | -4.5 | -4.0 | 33.9 | 34.6 | 1.2 | 1.2 | 23.1 | 22.6 | ||||||||||||
| Note: GDP growth for India and Japan are for fiscal years. For India, 2021 = FY2021/22, 2022 = FY2022/23, 2023 = FY2023/24, 2024 = FY2024/25. GG--General government. CAR--Current account receipts. Source: S&P Global Ratings. | ||||||||||||||||||||||
Australia (AAA/Stable/A-1+)
- Analyst: anthony.walker@spglobal.com
- Latest publication: Australia 'AAA/A-1+' Ratings Affirmed; Outlook Stable, Sept. 20, 2023
Rating score snapshot:
- Institutional assessment: 1
- Economic assessment: 1
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 1
- Fiscal assessment – Debt burden: 1
- Monetary assessment: 1
Outlook: Stable
The stable outlook reflects our expectation that the general government deficit and net debt will remain modest over the next two years. Despite the current account balance softening, Australia's external accounts will likely remain stronger than in the past.
Downside scenario
We could lower our ratings if the general government deficit widened materially, causing net debt and interest costs to rise. This could occur if the economic outlook or commodity prices weakened relative to our expectations, causing fiscal outcomes to materially underperform our forecasts.
Table 3
| Australia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 53.9 | 57.2 | 54.9 | 51.7 | 60.4 | 64.5 | 64.3 | 62.0 | 67.3 | 71.8 | ||||||||||||
| GDP growth | 2.3 | 2.9 | 2.2 | -0.1 | 2.2 | 3.7 | 3.3 | 1.2 | 2.0 | 2.4 | ||||||||||||
| GDP per capita growth | 0.6 | 1.4 | 0.7 | -1.3 | 2.1 | 2.5 | 1.4 | -0.3 | 0.5 | 0.9 | ||||||||||||
| Current account balance/GDP | -2.3 | -2.8 | -0.9 | 1.4 | 3.0 | 1.9 | 1.2 | 0.5 | 0.4 | 0.3 | ||||||||||||
| Gross external financing needs/CAR&FXR | 253.3 | 234.8 | 224.6 | 221.4 | 223.3 | 201.4 | 206.7 | 206.3 | 211.0 | 204.2 | ||||||||||||
| Narrow net external debt/CAR | 282.7 | 269.0 | 256.5 | 273.3 | 285.3 | 198.9 | 189.5 | 199.5 | 193.2 | 183.3 | ||||||||||||
| GG balance/GDP | -2.1 | -1.0 | -0.7 | -6.9 | -8.6 | -3.7 | -0.3 | -1.5 | -1.6 | -1.2 | ||||||||||||
| GG net debt/GDP | 10.3 | 12.5 | 11.8 | 19.4 | 26.8 | 27.8 | 26.7 | 26.1 | 26.5 | 26.4 | ||||||||||||
| CPI inflation | 1.7 | 1.9 | 1.7 | 1.3 | 1.6 | 4.5 | 7.0 | 4.6 | 3.5 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 157.4 | 156.4 | 153.6 | 176.0 | 168.5 | 167.8 | 158.9 | 160.3 | 158.3 | 157.9 | ||||||||||||
| 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-/Negative/B)
- Analyst: martin.foo@spglobal.com
- Latest publication: Bangladesh Outlook Revised To Negative On Enduring External Risk; 'BB-/B' Ratings Affirmed, July 25, 2023
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: Negative
We revised the long-term rating outlook on Bangladesh to negative from stable to reflect the risk that its external liquidity position could deteriorate further over the next 12 months. We also affirmed our 'BB-' long-term and 'B' short-term sovereign credit ratings on Bangladesh.
Downside scenario
We may lower the ratings on Bangladesh if net external debt or liquidity 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, a higher overall current account deficit than we forecast, or a failure to materially boost foreign exchange reserves would indicate downward pressure on the rating.
We could also downgrade Bangladesh if we observe a material and sustained rise in commercial banks' ownership of government debt as a proportion of the sector's total assets, signifying a limited ability for banks to lend more to the government without crowding out private sector borrowing.
Upside scenario
We may revise the outlook to stable if Bangladesh materially improves its external position, which would likely be indicated by a substantial increase in foreign exchange reserves combined with a modest current account deficit, and healthy growth in current account receipts.
Table 4
| Bangladesh | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 1.8 | 2.0 | 2.1 | 2.3 | 2.5 | 2.6 | 2.6 | 2.7 | 2.9 | 3.1 | ||||||||||||
| GDP growth | 6.6 | 7.3 | 7.9 | 3.5 | 6.9 | 7.1 | 5.5 | 6.0 | 6.3 | 6.4 | ||||||||||||
| GDP per capita growth | 5.5 | 6.2 | 6.8 | 2.4 | 5.7 | 5.9 | 4.3 | 4.8 | 5.1 | 5.2 | ||||||||||||
| Current account balance/GDP | -0.5 | -3.0 | -1.3 | -1.5 | -1.1 | -4.3 | -1.0 | -0.8 | -1.0 | -1.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 74.8 | 84.1 | 84.2 | 88.4 | 78.4 | 94.5 | 95.2 | 99.1 | 96.0 | 94.2 | ||||||||||||
| Narrow net external debt/CAR | 16.7 | 35.4 | 49.8 | 40.1 | 48.6 | 72.8 | 70.4 | 69.3 | 68.8 | 67.6 | ||||||||||||
| GG balance/GDP | -3.8 | -4.8 | -4.7 | -4.8 | -3.7 | -4.6 | -5.4 | -5.0 | -4.8 | -4.8 | ||||||||||||
| GG net debt/GDP | 19.6 | 20.3 | 21.8 | 23.7 | 25.1 | 28.1 | 31.4 | 33.1 | 34.6 | 36.0 | ||||||||||||
| CPI inflation | 5.9 | 5.5 | 5.5 | 6.0 | 5.6 | 7.6 | 6.8 | 6.0 | 6.0 | 6.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 41.5 | 41.3 | 40.5 | 40.6 | 40.5 | 40.5 | 40.3 | 40.2 | 40.4 | 40.9 | ||||||||||||
| 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 Stable, June 28, 2023
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 3
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 3
Outlook: Stable
The stable outlook reflects our view that China will maintain above-average growth over the next two years. The country's fiscal deficit could remain above pre-pandemic levels this year as the government increases spending to mitigate domestic and external challenges.
Downside scenario
We could take negative rating actions if we see a substantial weakening of fiscal discipline, such that the fiscal deficit remains much larger than 3% of GDP over the next three years. We could also lower the rating if contingent liabilities crystallize on the balance sheets of the local governments, resulting in a sharp rise in general government debt.
Upside scenario
We may raise our ratings on China if fiscal consolidation is faster than what we anticipate, resulting in a slower increase in net general government debt and stronger discipline in controlling off-balance sheet debt.
Table 5
| China | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 8.8 | 9.9 | 10.1 | 10.4 | 12.6 | 12.7 | 12.6 | 13.4 | 14.7 | 16.0 | ||||||||||||
| GDP growth | 7.0 | 6.8 | 6.0 | 2.4 | 8.1 | 3.0 | 4.8 | 4.4 | 5.0 | 4.5 | ||||||||||||
| GDP per capita growth | 6.4 | 6.4 | 5.6 | 2.2 | 8.1 | 3.1 | 4.8 | 4.4 | 5.1 | 4.6 | ||||||||||||
| Current account balance/GDP | 1.5 | 0.2 | 0.7 | 1.7 | 2.0 | 2.2 | 2.1 | 2.2 | 2.4 | 2.4 | ||||||||||||
| Gross external financing needs/CAR&FXR | 54.2 | 60.5 | 61.0 | 57.4 | 60.7 | 60.5 | 61.6 | 64.8 | 64.0 | 64.1 | ||||||||||||
| Narrow net external debt/CAR | -90.9 | -78.0 | -79.6 | -76.6 | -55.8 | -58.8 | -63.5 | -65.0 | -63.8 | -61.5 | ||||||||||||
| GG balance/GDP | -2.4 | -2.8 | -4.3 | -9.5 | -4.8 | -6.5 | -3.0 | -3.0 | -2.8 | -2.8 | ||||||||||||
| GG net debt/GDP | 30.6 | 31.6 | 32.9 | 39.9 | 40.3 | 43.8 | 47.9 | 47.9 | 47.9 | 47.6 | ||||||||||||
| CPI inflation | 1.6 | 2.1 | 2.9 | 2.5 | 0.9 | 2.0 | 0.6 | 2.3 | 2.3 | 2.3 | ||||||||||||
| Bank credit to resident private sector/GDP | 180.1 | 186.0 | 190.4 | 206.7 | 198.8 | 206.4 | 217.1 | 219.1 | 219.5 | 221.3 | ||||||||||||
| 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. | ||||||||||||||||||||||
Cook Islands (B+/Stable/B)
- Analyst: rebecca.hrvatin@spglobal.com
- Latest publication: Cook Islands 'B+/B' Ratings Affirmed; Outlook Stable, May 22, 2023
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 4
- External assessment: 5
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 1
- Monetary assessment: 6
Outlook: Stable
The stable outlook on our long-term rating on Cook Islands reflects our expectation that, over the next 12 months or so, the economic recovery will narrow fiscal deficits, and reduce net debt relative to GDP.
Downside scenario
We could lower our ratings if Cook Islands' public finances were to materially underperform our forecasts. This could occur if fiscal deficits do not narrow and the resulting increase in debt increases the budgetary interest burden to above 5% of government revenues annually.
Upside scenario
We could raise our ratings if there is a sustained improvement in the government's fiscal outlook or economic wealth and diversity improve.
Table 6
| Cook Islands | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 20.9 | 22.7 | 21.5 | 18.0 | 17.4 | 20.9 | 22.7 | 24.8 | 25.8 | 27.5 | ||||||||||||
| GDP growth | 6.8 | 8.9 | 5.3 | -5.2 | -19.0 | 11.8 | 11.6 | 6.8 | 3.7 | 3.6 | ||||||||||||
| GDP per capita growth | -19.2 | 6.9 | -2.1 | -9.5 | -15.7 | 23.3 | 17.6 | 6.0 | 2.9 | 2.8 | ||||||||||||
| Current account balance/GDP | 16.7 | 35.2 | 34.3 | 26.7 | -35.5 | -0.1 | 15.7 | 19.3 | 15.2 | 14.0 | ||||||||||||
| 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 | -20.4 | -24.3 | -40.1 | -43.2 | -25.5 | -27.3 | -26.2 | -23.9 | -21.9 | -20.6 | ||||||||||||
| GG balance/GDP | 6.8 | 4.1 | 5.0 | -6.3 | -23.1 | -7.3 | -4.3 | -2.3 | -1.5 | -0.8 | ||||||||||||
| GG net debt/GDP | -0.3 | -7.5 | -2.7 | 2.4 | 25.0 | 31.5 | 33.0 | 31.4 | 31.1 | 30.3 | ||||||||||||
| CPI inflation | -0.1 | 0.4 | 0.0 | 0.7 | 4.2 | 4.2 | 9.4 | 4.1 | 3.0 | 2.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 50.2 | 45.9 | 41.8 | 46.7 | 53.1 | 44.6 | 40.8 | 38.5 | 38.6 | 38.1 | ||||||||||||
| 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: (Full analysis) Fiji, Oct. 23, 2023
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 the international travel revival continues, 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 weaken significantly. 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, 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 6.1 | 6.3 | 6.1 | 4.9 | 4.8 | 5.5 | 6.0 | 6.2 | 6.5 | 6.8 | ||||||||||||
| GDP growth | 5.4 | 3.8 | -0.6 | -17.0 | -4.9 | 20.0 | 6.4 | 3.8 | 3.0 | 3.0 | ||||||||||||
| GDP per capita growth | 3.7 | 3.2 | -1.2 | -17.5 | -5.5 | 19.3 | 5.8 | 3.2 | 2.4 | 2.4 | ||||||||||||
| Current account balance/GDP | -6.7 | -8.5 | -12.8 | -13.9 | -15.9 | -17.3 | -14.2 | -9.7 | -8.9 | -7.7 | ||||||||||||
| Gross external financing needs/CAR&FXR | 100.0 | 101.1 | 111.3 | 109.3 | 108.2 | 102.2 | 106.3 | 112.5 | 118.1 | 121.9 | ||||||||||||
| Narrow net external debt/CAR | -10.5 | 3.5 | 9.8 | 25.8 | 14.6 | 27.7 | 37.6 | 43.2 | 48.0 | 49.7 | ||||||||||||
| GG balance/GDP | -1.9 | -4.3 | -3.6 | -6.6 | -11.8 | -11.2 | -6.5 | -5.0 | -3.6 | -3.5 | ||||||||||||
| GG net debt/GDP | 36.1 | 40.1 | 44.1 | 63.8 | 78.0 | 75.3 | 73.1 | 73.9 | 74.0 | 74.0 | ||||||||||||
| CPI inflation | 3.4 | 4.1 | 1.8 | -2.6 | 0.2 | 4.5 | 3.0 | 2.5 | 2.6 | 2.8 | ||||||||||||
| Bank credit to resident private sector/GDP | 70.3 | 71.1 | 73.4 | 88.5 | 96.3 | 83.3 | 78.9 | 79.6 | 81.1 | 82.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
Hong Kong (AA+/Stable/A-1+)
- Analyst: kimeng.tan@spglobal.com
- Latest publication: Hong Kong Ratings Affirmed At 'AA+/A-1+'; Outlook Stable, May 25, 2023
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 economic recovery will be sustained and fiscal deficits will narrow substantially over the next two years.
Downside scenario
We could lower the ratings if Hong Kong's economic stability or policy predictability materially worsens, such that we assess its trend growth to be below that of peers'.
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 Special Administrative Region's (SAR) long-term economic prospects.
Table 8
| Hong Kong | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 46.2 | 48.5 | 48.4 | 46.1 | 49.8 | 49.0 | 51.0 | 53.8 | 56.4 | 58.8 | ||||||||||||
| GDP growth | 3.8 | 2.9 | -1.7 | -6.5 | 6.4 | -3.5 | 3.3 | 2.6 | 2.6 | 2.3 | ||||||||||||
| GDP per capita growth | 3.0 | 2.0 | -2.4 | -6.2 | 7.4 | -2.6 | 1.2 | 2.5 | 2.6 | 2.3 | ||||||||||||
| Current account balance/GDP | 4.6 | 3.7 | 5.9 | 7.0 | 11.8 | 10.5 | 8.0 | 7.6 | 6.1 | 6.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 175.2 | 177.8 | 188.3 | 187.7 | 180.2 | 188.6 | 191.2 | 186.8 | 185.1 | 183.3 | ||||||||||||
| Narrow net external debt/CAR | -65.5 | -59.1 | -62.8 | -71.4 | -56.9 | -66.5 | -66.9 | -61.7 | -57.5 | -53.5 | ||||||||||||
| GG balance/GDP | 5.6 | 2.4 | -0.6 | -9.4 | 0.0 | -6.7 | -2.5 | -0.3 | -0.2 | 0.1 | ||||||||||||
| GG net debt/GDP | -42.1 | -42.0 | -41.3 | -34.7 | -32.5 | -25.6 | -21.6 | -20.3 | -19.2 | -18.5 | ||||||||||||
| CPI inflation | 1.5 | 2.3 | 2.9 | 0.3 | 1.5 | 1.9 | 1.9 | 2.2 | 2.2 | 2.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 237.6 | 232.7 | 248.1 | 268.3 | 262.2 | 267.5 | 264.2 | 264.8 | 265.9 | 267.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
India (BBB-/Stable/A-3)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: India 'BBB-/A-3' Sovereign Credit Ratings Affirmed; Outlook Stable, May 18, 2023
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 rating outlook reflects our expectation that India's sound economic fundamentals will be sufficient to offset the government's weak fiscal performance, helping to sustain elevated government funding needs and a high interest burden over the next 24 months.
Downside scenario
We may lower the ratings if: (1) India's economic growth slows materially, on a sustained basis, such that this negatively affects its fiscal sustainability; or (2) changes in net general government debt, general government debt to GDP, or the government's interest burden 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 India's fiscal metrics dramatically improve, on a sustained basis.
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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 2.0 | 2.0 | 2.1 | 1.9 | 2.3 | 2.4 | 2.6 | 2.8 | 3.0 | 3.3 | ||||||||||||
| GDP growth | 6.8 | 6.5 | 3.9 | -5.8 | 9.1 | 7.2 | 6.4 | 6.4 | 6.9 | 7.1 | ||||||||||||
| GDP per capita growth | 5.7 | 5.4 | 2.8 | -6.8 | 8.2 | 6.5 | 5.5 | 5.5 | 6.0 | 6.1 | ||||||||||||
| Current account balance/GDP | -1.8 | -2.1 | -0.9 | 0.9 | -1.2 | -2.4 | 0.1 | -0.9 | -0.5 | -0.1 | ||||||||||||
| Gross external financing needs/CAR&FXR | 87.8 | 86.7 | 83.8 | 74.5 | 76.9 | 81.6 | 78.6 | 81.9 | 81.6 | 81.1 | ||||||||||||
| Narrow net external debt/CAR | 8.5 | 10.3 | 2.0 | -17.0 | -12.5 | -5.2 | -3.1 | -1.7 | -1.2 | -2.0 | ||||||||||||
| GG balance/GDP | -6.7 | -6.6 | -7.8 | -13.4 | -9.7 | -10.0 | -8.9 | -8.1 | -7.6 | -7.3 | ||||||||||||
| GG net debt/GDP | 70.0 | 71.5 | 76.5 | 90.7 | 85.3 | 83.5 | 85.0 | 85.1 | 84.5 | 83.7 | ||||||||||||
| CPI inflation | 3.6 | 3.4 | 4.8 | 6.2 | 5.5 | 6.7 | 5.5 | 4.5 | 4.6 | 4.7 | ||||||||||||
| Bank credit to resident private sector/GDP | 51.5 | 52.7 | 52.8 | 56.5 | 51.8 | 50.4 | 51.4 | 51.6 | 51.6 | 51.7 | ||||||||||||
| 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. | ||||||||||||||||||||||
Indonesia (BBB/Stable/A-2)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Indonesia Ratings Affirmed At 'BBB/A-2'; Outlook Stable, July 4, 2023
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 rating outlook reflects our expectation that Indonesia will achieve solid economic growth over the next two years. This will support prudent fiscal outcomes and stabilize debt.
Downside scenario
We may lower the ratings if Indonesia's economy slows materially, such that trend growth in real GDP per capita no longer outpaces that of peers.
Indications that changes in the net general government debt will rise consistently, and average more than 3% of GDP annually, or general government interest payments will surpass 15% of revenues on a sustained basis, will exert downward pressure on the ratings.
A significant reversal of Indonesia's current account receipts, leading to a weakening in the external balance sheet or liquidity profile, would also indicate downward pressure on the ratings.
Upside scenario
We may raise the ratings 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.
A decline in Indonesia's net debt stock to less than 30% of GDP, or interest payments below 10% of general government revenues, and a sustained decline in change in net general government debt of less than 3% of GDP per year, would indicate upward pressure on the ratings.
Table 10
| Indonesia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 3.8 | 3.9 | 4.1 | 3.9 | 4.3 | 4.8 | 4.9 | 5.1 | 5.4 | 5.8 | ||||||||||||
| GDP growth | 5.1 | 5.2 | 5.0 | -2.1 | 3.7 | 5.3 | 5.0 | 4.9 | 5.0 | 5.0 | ||||||||||||
| GDP per capita growth | 3.8 | 4.0 | 3.9 | -3.1 | 3.0 | 4.6 | 4.3 | 4.0 | 4.2 | 4.2 | ||||||||||||
| Current account balance/GDP | -1.6 | -2.9 | -2.7 | -0.4 | 0.3 | 1.0 | -0.1 | -0.6 | -1.0 | -1.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 92.1 | 95.9 | 98.2 | 88.6 | 87.0 | 86.2 | 89.8 | 90.7 | 91.9 | 90.2 | ||||||||||||
| Narrow net external debt/CAR | 96.0 | 100.9 | 115.6 | 132.6 | 90.4 | 67.6 | 73.5 | 69.7 | 64.8 | 60.5 | ||||||||||||
| GG balance/GDP | -2.5 | -1.8 | -2.2 | -6.1 | -4.5 | -2.3 | -2.1 | -2.3 | -2.4 | -2.4 | ||||||||||||
| GG net debt/GDP | 26.2 | 27.2 | 27.6 | 35.7 | 37.6 | 36.2 | 36.1 | 36.0 | 35.8 | 35.6 | ||||||||||||
| CPI inflation | 3.6 | 3.1 | 2.8 | 2.0 | 1.6 | 4.2 | 3.6 | 2.8 | 3.2 | 3.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 35.0 | 36.0 | 35.7 | 36.2 | 34.4 | 32.8 | 33.8 | 34.8 | 35.6 | 36.2 | ||||||||||||
| 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: rain.yin@spglobal.com
- Last publication: (Full analysis) Japan, Nov. 7, 2023
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 gradual economic recovery. Over fiscal years 2023-2026, we expect average real GDP per capita growth at about 1.6% and nominal GDP growth to be about 3.2% a year. The modest pace of economic recovery will likely also slow government revenue growth, while spending on interest payments, social services, and national defense will continue to grow. We expect these factors to keep annual general government deficits no lower than 4% of GDP in the next three to four years.
Downside scenario
We may lower the ratings on Japan if economic growth rates are persistently and significantly below that of other high-income economies.
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 net general government debt levels to 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 39.1 | 39.9 | 40.5 | 40.1 | 40.1 | 34.3 | 34.0 | 34.7 | 37.4 | 40.3 | ||||||||||||
| GDP growth | 1.8 | 0.3 | -0.8 | -4.1 | 2.6 | 1.3 | 1.6 | 0.9 | 1.0 | 0.9 | ||||||||||||
| GDP per capita growth | 2.0 | 0.5 | -0.6 | -3.7 | 2.9 | 1.8 | 2.1 | 1.4 | 1.5 | 1.5 | ||||||||||||
| Current account balance/GDP | 4.1 | 3.5 | 3.5 | 3.0 | 3.9 | 1.9 | 2.8 | 2.8 | 2.8 | 2.7 | ||||||||||||
| Gross external financing needs/CAR&FXR | 171.9 | 168.3 | 180.4 | 188.4 | 197.0 | 186.6 | 209.1 | 207.9 | 204.1 | 201.0 | ||||||||||||
| Narrow net external debt/CAR | -109.0 | -81.8 | -82.9 | -101.2 | -89.0 | -48.0 | -45.3 | -44.3 | -37.0 | -25.5 | ||||||||||||
| GG balance/GDP | -2.9 | -2.4 | -3.1 | -10.0 | -5.9 | -8.2 | -8.0 | -5.2 | -4.5 | -4.0 | ||||||||||||
| GG net debt/GDP | 144.6 | 146.9 | 150.6 | 161.3 | 162.1 | 161.6 | 158.7 | 160.5 | 161.6 | 162.0 | ||||||||||||
| CPI inflation | 0.5 | 0.9 | 0.5 | 0.0 | -0.2 | 2.5 | 3.1 | 2.2 | 1.8 | 1.4 | ||||||||||||
| Bank credit to resident private sector/GDP | 145.3 | 146.9 | 153.4 | 166.9 | 168.6 | 168.2 | 163.3 | 163.1 | 162.8 | 162.4 | ||||||||||||
| 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. | ||||||||||||||||||||||
Republic of Korea (AA/Stable/A-1+)
- Analyst: kimeng.tan@spglobal.com
- Latest publication: (Full Analysis) Korea (the Republic of), Oct. 29, 2023
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 at least. 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 may lower the sovereign ratings on Korea if we believe geopolitical tensions related to the Democratic People's Republic of Korea (DPRK; North Korea) will intensify to a point that they will seriously damage Korea's economic, fiscal, or external performance.
Upside scenario
We may raise the sovereign ratings on Korea if the security and contingent liability risks posed by North Korea recede.
(Last Research Update published on April 26, 2022
Table 12
| Korea | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 31.6 | 33.4 | 31.9 | 31.7 | 35.1 | 32.4 | 33.1 | 35.6 | 38.9 | 41.8 | ||||||||||||
| GDP growth | 3.2 | 2.9 | 2.2 | -0.7 | 4.3 | 2.6 | 1.2 | 2.2 | 2.4 | 2.0 | ||||||||||||
| GDP per capita growth | 2.9 | 2.5 | 1.9 | -0.9 | 4.5 | 2.8 | 1.3 | 2.3 | 2.5 | 2.1 | ||||||||||||
| Current account balance/GDP | 4.6 | 4.5 | 3.6 | 4.6 | 4.7 | 1.8 | 0.6 | 1.6 | 2.2 | 2.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 72.4 | 73.4 | 75.0 | 73.0 | 77.1 | 82.3 | 86.5 | 88.3 | 89.5 | 90.5 | ||||||||||||
| Narrow net external debt/CAR | -49.5 | -45.7 | -50.5 | -51.2 | -35.2 | -23.9 | -20.2 | -15.1 | -12.0 | -9.3 | ||||||||||||
| GG balance/GDP | 2.6 | 3.1 | 0.9 | -3.3 | -3.7 | -3.2 | -0.8 | 0.0 | 0.3 | 0.3 | ||||||||||||
| GG net debt/GDP | 6.5 | 6.4 | 3.4 | 4.2 | 7.4 | 10.3 | 10.7 | 10.2 | 9.4 | 8.7 | ||||||||||||
| CPI inflation | 1.9 | 1.5 | 0.4 | 0.5 | 2.5 | 5.1 | 3.6 | 2.5 | 2.1 | 2.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 147.5 | 151.7 | 158.8 | 172.7 | 178.0 | 182.5 | 186.0 | 186.9 | 188.1 | 190.4 | ||||||||||||
| 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 'A-/A-2' Foreign Currency And 'A/A-1' Local Currency Ratings Affirmed; Outlook Stable, June 27, 2023
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 fiscal policy will allow modest improvements in fiscal performance over the next two to three years.
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. Such a scenario may be realized through continuing political stability that would narrow deficits sustainably. Consequently, government net debt would fall below 60% of GDP or interest payments decline below 10% of government revenues.
Table 13
| Malaysia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 10.0 | 11.1 | 11.2 | 10.4 | 11.5 | 12.5 | 12.2 | 13.6 | 14.8 | 15.7 | ||||||||||||
| GDP growth | 5.8 | 4.8 | 4.4 | -5.5 | 3.3 | 8.7 | 4.0 | 4.5 | 4.5 | 4.6 | ||||||||||||
| GDP per capita growth | 4.5 | 3.7 | 4.0 | -5.2 | 2.9 | 8.4 | 1.7 | 3.4 | 3.4 | 3.6 | ||||||||||||
| Current account balance/GDP | 2.8 | 2.2 | 3.5 | 4.2 | 3.9 | 3.1 | 3.5 | 4.5 | 4.7 | 5.7 | ||||||||||||
| Gross external financing needs/CAR&FXR | 92.6 | 93.0 | 93.6 | 91.4 | 91.6 | 91.6 | 93.1 | 88.6 | 88.0 | 86.6 | ||||||||||||
| Narrow net external debt/CAR | 22.1 | 24.3 | 24.6 | 28.0 | 24.3 | 22.5 | 21.2 | 17.3 | 14.3 | 12.2 | ||||||||||||
| GG balance/GDP | -2.4 | -2.7 | -2.0 | -4.6 | -5.9 | -5.3 | -4.7 | -4.0 | -3.5 | -3.3 | ||||||||||||
| GG net debt/GDP | 55.1 | 56.2 | 58.9 | 69.6 | 70.1 | 65.3 | 67.4 | 66.6 | 65.7 | 65.2 | ||||||||||||
| CPI inflation | 3.9 | 0.9 | 0.7 | -1.1 | 2.5 | 3.4 | 2.8 | 2.4 | 2.4 | 2.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 127.2 | 131.1 | 131.6 | 145.5 | 138.2 | 124.5 | 127.5 | 125.2 | 123.7 | 123.3 | ||||||||||||
| 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. | ||||||||||||||||||||||
Mongolia (B/Stable/B)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: Mongolia 'B/B' Ratings Affirmed; Outlook Stable, July 27, 2023
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 risks to Mongolia's commodity export and growth prospects against our expectation that the country's economy will improve further over the next 12 months. The latter will improve 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 ratings on Mongolia if the economy performs better than our current projections such that we expect its long-term trend growth to be much stronger than that of 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 ratings if we observe that Mongolia makes material improvements in its institutional settings, especially in the predictability of policymaking.
Table 14
| Mongolia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 3.6 | 4.1 | 4.3 | 4.0 | 4.6 | 5.1 | 5.3 | 5.9 | 6.7 | 7.4 | ||||||||||||
| GDP growth | 5.6 | 7.6 | 5.5 | -4.4 | 1.6 | 5.0 | 5.5 | 6.0 | 6.2 | 6.3 | ||||||||||||
| GDP per capita growth | 3.6 | 5.6 | 3.6 | -6.1 | 0.1 | 3.5 | 3.9 | 4.4 | 4.6 | 4.7 | ||||||||||||
| Current account balance/GDP | -10.1 | -16.8 | -15.2 | -5.0 | -13.4 | -13.2 | -12.6 | -10.3 | -7.5 | -5.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 149.4 | 130.6 | 123.6 | 104.9 | 117.2 | 121.6 | 131.6 | 127.4 | 121.9 | 117.6 | ||||||||||||
| Narrow net external debt/CAR | 223.3 | 181.0 | 166.0 | 183.5 | 165.8 | 133.3 | 120.2 | 100.4 | 82.9 | 69.3 | ||||||||||||
| GG balance/GDP | -3.8 | 2.6 | 1.2 | -8.4 | -2.7 | 1.3 | -2.6 | -2.5 | -2.4 | -2.4 | ||||||||||||
| GG net debt/GDP | 85.3 | 74.3 | 63.8 | 78.0 | 66.9 | 61.6 | 55.7 | 43.6 | 40.7 | 38.2 | ||||||||||||
| CPI inflation | 4.3 | 6.8 | 7.3 | 3.8 | 7.4 | 15.2 | 10.0 | 8.0 | 7.5 | 7.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 54.8 | 56.9 | 50.4 | 47.9 | 49.3 | 43.2 | 45.1 | 46.7 | 48.5 | 49.0 | ||||||||||||
| 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. | ||||||||||||||||||||||
New Zealand (AA+/Stable/A-1+)
- Analyst: martin.foo@spglobal.com
- Latest publication: New Zealand 'AA+/A-1+' Foreign Currency Ratings Affirmed; Outlook Stable, Sept. 8, 2023
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 on our long-term sovereign credit ratings on New Zealand reflects our assessment that the country's excellent institutions, wealthy economy, and moderate public indebtedness will balance credit risks associated with a large current account deficit, high levels of external and private-sector debt, and volatile property prices over the next two years.
Downside scenario
We could lower our ratings on New Zealand if the fiscal deficit does not narrow as we forecast, driving government debt and interest costs substantially higher. We could also lower our ratings if the country has persistently weak current account deficits of more than 20% of current account receipts, or if real growth is materially weaker than that of advanced economy peers on a sustained basis.
Upside scenario
We could raise our foreign-currency long-term rating on New Zealand if the fiscal metrics materially strengthen. Indications of this strengthening would include the general government deficit contracting to less than 3% of GDP, and net general government debt or interest expenses falling on a structural basis to less than 30% of GDP and 5% of government revenues, respectively.
Table 15
| New Zealand | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 41.1 | 43.4 | 42.0 | 39.9 | 46.7 | 48.3 | 46.9 | 47.3 | 49.8 | 52.7 | ||||||||||||
| GDP growth | 3.5 | 3.6 | 3.2 | -0.7 | 6.0 | 1.2 | 3.2 | 1.1 | 2.3 | 2.6 | ||||||||||||
| GDP per capita growth | 1.3 | 1.7 | 1.5 | -2.8 | 5.0 | 1.0 | 2.0 | -1.2 | 0.9 | 1.6 | ||||||||||||
| Current account balance/GDP | -2.5 | -3.5 | -3.5 | -1.6 | -3.3 | -7.9 | -7.5 | -6.5 | -6.4 | -6.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 193.6 | 180.0 | 166.4 | 171.2 | 177.5 | 217.0 | 214.7 | 208.7 | 209.4 | 212.1 | ||||||||||||
| Narrow net external debt/CAR | 179.8 | 159.1 | 161.2 | 168.8 | 199.9 | 192.2 | 182.9 | 203.6 | 201.9 | 200.6 | ||||||||||||
| GG balance/GDP | 0.8 | 0.3 | -0.4 | -7.8 | -3.5 | -5.2 | -5.2 | -5.0 | -2.5 | -2.1 | ||||||||||||
| GG net debt/GDP | 21.5 | 17.8 | 15.7 | 24.1 | 20.5 | 27.5 | 29.8 | 32.9 | 33.4 | 33.5 | ||||||||||||
| CPI inflation | 1.4 | 1.5 | 1.7 | 1.8 | 1.9 | 6.3 | 6.9 | 4.4 | 2.9 | 2.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 160.7 | 157.5 | 158.3 | 165.7 | 160.0 | 157.6 | 147.8 | 149.1 | 150.1 | 150.7 | ||||||||||||
| 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. | ||||||||||||||||||||||
Pakistan (CCC+/Stable/C)
- Analyst: andrew.wood@spglobal.com
- Latest publication: (Full analysis) Pakistan, Sept. 13, 2023
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 continued 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, to the extent that the government's willingness or ability to service its commercial debt is diminished. One potential indication of domestic financing stress would be further increases in the government's interest burden, which we estimate will exceed 45% of government revenues over the next few years.
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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 1.7 | 1.7 | 1.5 | 1.4 | 1.6 | 1.7 | 1.5 | 1.5 | 1.6 | 1.6 | ||||||||||||
| GDP growth | 5.6 | 6.1 | 3.1 | -0.9 | 5.8 | 6.1 | 0.3 | 3.0 | 3.2 | 3.3 | ||||||||||||
| GDP per capita growth | -0.1 | 3.6 | 1.2 | -2.8 | 3.4 | 4.2 | -1.5 | 1.3 | 1.5 | 1.6 | ||||||||||||
| Current account balance/GDP | -3.6 | -5.4 | -4.2 | -1.5 | -0.8 | -4.7 | -0.7 | -0.5 | -0.4 | -0.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 112.4 | 131.3 | 145.4 | 137.8 | 116.7 | 124.7 | 122.7 | 128.4 | 122.5 | 121.0 | ||||||||||||
| Narrow net external debt/CAR | 108.5 | 135.8 | 158.8 | 163.7 | 142.0 | 143.5 | 165.0 | 159.5 | 160.2 | 158.6 | ||||||||||||
| GG balance/GDP | -5.2 | -5.8 | -7.9 | -7.1 | -6.1 | -7.9 | -7.7 | -7.5 | -6.3 | -5.8 | ||||||||||||
| GG net debt/GDP | 54.8 | 58.2 | 69.1 | 70.8 | 65.5 | 68.4 | 70.2 | 65.9 | 67.3 | 68.4 | ||||||||||||
| CPI inflation | 4.2 | 3.9 | 7.3 | 11.7 | 8.9 | 12.2 | 29.2 | 12.0 | 9.0 | 9.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 17.6 | 18.7 | 19.0 | 18.1 | 16.6 | 16.6 | 14.1 | 12.4 | 12.5 | 12.7 | ||||||||||||
| 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. | ||||||||||||||||||||||
Papua New Guinea (B-/Stable/B)
- Analyst: martin.foo@spglobal.com
- Latest publication: Papua New Guinea 'B-/B' Ratings Affirmed; Outlook Stable, June 9, 2023
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 6
- External assessment: 6
- Fiscal assessment – Flexibility and performance: 6
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 5
Outlook: Stable
The stable outlook reflects our expectation that PNG will continue its path of gradual fiscal consolidation, stabilizing the country's public debt burden over the next 12 months.
Downside scenario
We could lower our ratings if PNG's fiscal or external indicators or institutional settings deteriorate sharply, heightening risks around debt serviceability.
Upside scenario
We could raise our ratings if PNG materially outperforms our fiscal projections and achieves a strong and sustained uptick in GDP growth.
Table 17
| Papua New Guinea | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 2.7 | 2.8 | 2.8 | 2.7 | 2.9 | 2.5 | 3.4 | 3.5 | 3.6 | 3.7 | ||||||||||||
| GDP growth | 3.5 | -0.3 | 4.5 | -3.2 | 0.1 | 4.5 | 3.7 | 4.4 | 3.1 | 3.1 | ||||||||||||
| GDP per capita growth | 1.5 | -2.2 | 2.5 | -5.0 | -2.0 | 2.4 | 1.6 | 2.3 | 1.0 | 1.0 | ||||||||||||
| Current account balance/GDP | 15.9 | 13.6 | 14.4 | 14.3 | 17.1 | 16.1 | 15.0 | 14.7 | 14.2 | 13.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 109.5 | 95.9 | 91.9 | 89.5 | 71.3 | 74.3 | 73.1 | 74.4 | 75.2 | 74.1 | ||||||||||||
| Narrow net external debt/CAR | 139.3 | 125.3 | 104.7 | 136.7 | 115.1 | 128.6 | 107.7 | 120.5 | 122.3 | 125.7 | ||||||||||||
| GG balance/GDP | -2.5 | -2.6 | -5.0 | -8.9 | -6.8 | -5.3 | -4.5 | -4.1 | -3.5 | -3.2 | ||||||||||||
| GG net debt/GDP | 29.5 | 27.6 | 36.4 | 43.7 | 46.5 | 42.0 | 45.3 | 46.7 | 47.9 | 48.3 | ||||||||||||
| CPI inflation | 5.4 | 4.4 | 3.9 | 4.9 | 4.5 | 5.3 | 5.4 | 4.9 | 4.6 | 4.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 18.9 | 18.3 | 18.2 | 18.8 | 16.4 | 14.3 | 14.1 | 13.6 | 13.3 | 12.9 | ||||||||||||
| 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. 28, 2023
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 the 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. This compares with a gradual improvement that we currently project.
Indications of downward pressure on the ratings would be: (1) annual changes in net general government debt that are consistently higher than 4% of GDP and the general government net debt stock exceeding 60% of GDP; or (2) 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 exert 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 we assess a significant improvement in institutional settings that leads to a material enhancement in the Philippines' credit metrics.
Table 18
| Philippines | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 3.2 | 3.3 | 3.5 | 3.3 | 3.6 | 3.6 | 3.9 | 4.3 | 4.8 | 5.4 | ||||||||||||
| GDP growth | 6.9 | 6.3 | 6.1 | -9.5 | 5.7 | 7.6 | 5.4 | 5.9 | 6.2 | 6.4 | ||||||||||||
| GDP per capita growth | 5.2 | 4.7 | 4.6 | -10.8 | 4.3 | 6.2 | 3.8 | 4.3 | 4.6 | 4.9 | ||||||||||||
| Current account balance/GDP | -0.7 | -2.6 | -0.8 | 3.2 | -1.5 | -4.5 | -2.8 | -2.3 | -2.0 | -2.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 70.5 | 74.1 | 74.0 | 62.3 | 64.9 | 72.3 | 75.7 | 75.3 | 76.6 | 78.0 | ||||||||||||
| Narrow net external debt/CAR | -25.2 | -18.6 | -23.7 | -36.2 | -27.3 | -9.2 | -9.6 | -7.2 | -5.3 | -3.8 | ||||||||||||
| GG balance/GDP | -0.5 | -1.3 | -1.7 | -5.7 | -6.2 | -4.4 | -3.8 | -3.2 | -2.7 | -2.3 | ||||||||||||
| GG net debt/GDP | 27.9 | 28.0 | 28.9 | 38.1 | 42.7 | 45.2 | 44.3 | 43.8 | 42.5 | 41.0 | ||||||||||||
| CPI inflation | 2.9 | 5.2 | 2.4 | 2.4 | 3.9 | 5.8 | 5.9 | 3.4 | 3.2 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 47.3 | 49.0 | 49.3 | 53.5 | 51.3 | 50.1 | 49.0 | 49.8 | 50.3 | 50.8 | ||||||||||||
| 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) Singapore, May 22, 2023
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 Singapore's strong economic fundamentals, fiscal, and external settings will remain intact over the next 24 months, at least, despite challenging macroeconomic conditions.
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 in the policy environment. However, in our view, Singapore's deep fiscal resources and strong institutions should enable it to address such temporary shocks and mitigate structural damage to the economy. Therefore, we consider a downgrade in the next two years as improbable.
(Last Research Update published on April 29, 2021)
Table 19
| Singapore | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 61.2 | 66.8 | 66.1 | 61.3 | 77.7 | 82.8 | 84.1 | 89.1 | 95.0 | 100.1 | ||||||||||||
| GDP growth | 4.5 | 3.6 | 1.3 | -3.9 | 8.9 | 3.7 | 1.1 | 2.6 | 2.7 | 2.6 | ||||||||||||
| GDP per capita growth | 4.5 | 3.1 | 0.2 | -3.6 | 13.5 | 0.3 | 0.4 | 2.0 | 2.1 | 2.0 | ||||||||||||
| Current account balance/GDP | 18.1 | 15.7 | 16.2 | 16.5 | 18.0 | 19.3 | 15.9 | 15.9 | 15.7 | 16.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 156.1 | 155.0 | 157.5 | 164.0 | 148.5 | 141.2 | 162.7 | 159.4 | 156.2 | 154.1 | ||||||||||||
| Narrow net external debt/CAR | -75.7 | -65.9 | -68.5 | -83.4 | -85.2 | -63.5 | -81.2 | -89.7 | -92.0 | -90.2 | ||||||||||||
| GG balance/GDP | 7.7 | 4.5 | 7.1 | -13.8 | 0.5 | -0.3 | 2.0 | 1.5 | 1.5 | 1.5 | ||||||||||||
| GG net debt/GDP | -59.9 | -56.2 | -52.6 | -49.2 | -61.5 | -18.1 | -28.1 | -30.2 | -29.9 | -29.9 | ||||||||||||
| CPI inflation | 0.6 | 0.4 | 0.6 | -0.2 | 2.3 | 6.1 | 4.7 | 2.9 | 2.2 | 2.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 121.0 | 117.8 | 119.3 | 129.5 | 143.3 | 126.4 | 130.1 | 129.4 | 127.6 | 125.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
Sri Lanka (SD/--/SD)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Sri Lanka Local Currency Ratings Raised To 'CCC+/C' From 'SD/SD'; Outlook Stable, Sept. 25, 2023
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: 5
Outlook:
Our long-term foreign currency rating on Sri Lanka is 'SD'. We do not assign outlooks to 'SD' ratings because they express a condition and not a forward-looking opinion of default probability.
The stable outlook on the long-term local currency rating reflects the balance of improvements to the government's debt profile achieved through its domestic restructuring exercises against the continued risk to the government's fiscal sustainability posed by Sri Lanka's ongoing economic, external, and fiscal pressures.
Downside scenario
We could lower the long-term local currency ratings on Sri Lanka if there are indications of further restructuring of obligations denominated in Sri Lankan rupees to commercial creditors. Developments that could precede these indications include a rapid rise in inflation, a further rise in the government's interest burden, or a significantly worse fiscal performance by the government leading to local currency funding pressures.
Upside scenario
We could raise the long-term local currency sovereign credit rating on Sri Lanka if we perceive that the sustainability of the government's large local currency debt stock has improved further. This could be the case if, for example, the government's fiscal metrics, and the performance of the Sri Lankan economy, improve much more quickly than we expect.
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 creditworthiness post-restructuring.
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 20
| Sri Lanka | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 4.4 | 4.4 | 4.1 | 3.9 | 4.0 | 3.9 | 3.5 | 4.0 | 4.2 | 4.3 | ||||||||||||
| GDP growth | 6.5 | 2.3 | -0.2 | -4.6 | 3.5 | -7.8 | -2.0 | 2.0 | 2.6 | 2.6 | ||||||||||||
| GDP per capita growth | 5.3 | 1.2 | -0.8 | -5.1 | 2.4 | -7.9 | -2.7 | 1.3 | 1.9 | 1.9 | ||||||||||||
| Current account balance/GDP | -2.5 | -3.0 | -2.1 | -1.4 | -3.7 | -1.7 | 0.3 | -0.8 | -1.1 | -1.3 | ||||||||||||
| Gross external financing needs/CAR&FXR | 128.2 | 120.5 | 123.5 | 119.9 | 135.8 | 149.6 | 150.5 | 132.1 | 127.1 | 122.8 | ||||||||||||
| Narrow net external debt/CAR | 141.0 | 137.5 | 148.1 | 171.4 | 189.4 | 181.1 | 181.0 | 162.8 | 155.4 | 150.2 | ||||||||||||
| GG balance/GDP | -5.1 | -5.0 | -9.0 | -10.6 | -11.7 | -10.2 | -8.4 | -8.0 | -6.5 | -6.0 | ||||||||||||
| GG net debt/GDP | 71.6 | 77.6 | 81.2 | 95.7 | 100.8 | 115.3 | 110.0 | 111.1 | 110.7 | 109.9 | ||||||||||||
| CPI inflation | 7.3 | 0.4 | 6.2 | 4.6 | 14.0 | 59.2 | 3.0 | 8.5 | 7.5 | 7.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 38.2 | 41.2 | 41.9 | 46.4 | 48.7 | 39.7 | 39.4 | 41.0 | 42.6 | 44.4 | ||||||||||||
| 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. | ||||||||||||||||||||||
Taiwan (AA+/Stable/A-1+)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: Ratings On Taiwan Affirmed At 'AA+/A-1+'; Outlook Stable, April 26, 2023
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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 25.1 | 25.8 | 25.9 | 28.6 | 33.2 | 32.7 | 32.2 | 33.2 | 34.7 | 36.3 | ||||||||||||
| GDP growth | 3.3 | 2.8 | 3.1 | 3.4 | 6.5 | 2.4 | 1.2 | 3.0 | 2.6 | 2.6 | ||||||||||||
| GDP per capita growth | 3.2 | 2.7 | 3.0 | 3.6 | 7.4 | 2.8 | 1.1 | 2.9 | 2.5 | 2.5 | ||||||||||||
| Current account balance/GDP | 14.1 | 11.6 | 10.9 | 14.3 | 15.2 | 13.3 | 12.8 | 12.4 | 12.5 | 12.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 60.6 | 62.8 | 63.5 | 58.6 | 58.8 | 62.1 | 59.1 | 59.0 | 59.3 | 59.6 | ||||||||||||
| Narrow net external debt/CAR | -109.3 | -101.1 | -114.2 | -130.7 | -104.2 | -104.8 | -117.3 | -115.6 | -110.6 | -106.3 | ||||||||||||
| GG balance/GDP | -0.1 | 0.0 | 0.1 | -1.0 | -0.2 | 0.2 | -1.5 | -1.5 | -1.1 | -1.1 | ||||||||||||
| GG net debt/GDP | 34.7 | 33.5 | 31.9 | 31.4 | 29.1 | 27.6 | 28.1 | 28.0 | 28.1 | 28.1 | ||||||||||||
| CPI inflation | 0.6 | 1.4 | 0.6 | -0.2 | 2.0 | 3.0 | 2.5 | 1.5 | 1.0 | 1.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 151.8 | 156.7 | 161.0 | 164.8 | 165.1 | 168.4 | 170.3 | 168.8 | 168.9 | 168.7 | ||||||||||||
| 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; Outlook Stable, Nov. 28, 2023
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 the long-term ratings on Thailand reflects our view that the country will sustain its economic recovery over the next 12-24 months, with support from planned fiscal measures and a recovery in the tourism sector.
Downside scenario
We may lower the ratings if Thailand's economic growth is persistently weaker than what we currently forecast. This could increase the pressure on the current policymaking process and raise the likelihood: (1) that the Thai economy will grow significantly slower than peers at a similar level of income; (2) per capita income could stagnate; or (3) fiscal settings could materially weaken over time.
Upside scenario
We may consider raising the ratings if Thailand establishes an extended track record of enhanced political stability, and if we assess that incentives for abrupt political changes have diminished.
Table 22
| Thailand | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 6.6 | 7.3 | 7.8 | 7.2 | 7.2 | 7.1 | 7.3 | 7.7 | 8.1 | 8.6 | ||||||||||||
| GDP growth | 4.2 | 4.2 | 2.1 | -6.1 | 1.5 | 2.6 | 2.5 | 4.2 | 3.0 | 3.2 | ||||||||||||
| GDP per capita growth | 3.8 | 3.9 | 1.8 | -6.3 | 1.3 | 2.5 | 2.4 | 4.1 | 2.9 | 3.1 | ||||||||||||
| Current account balance/GDP | 9.6 | 5.6 | 7.0 | 4.2 | -2.0 | -3.2 | 1.2 | 2.1 | 2.2 | 2.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 66.9 | 68.7 | 66.4 | 62.8 | 70.3 | 73.4 | 75.5 | 76.0 | 76.4 | 77.1 | ||||||||||||
| Narrow net external debt/CAR | -26.9 | -25.6 | -28.6 | -40.6 | -29.4 | -21.1 | -19.0 | -18.3 | -16.7 | -15.5 | ||||||||||||
| GG balance/GDP | 0.8 | 1.1 | 0.2 | -3.4 | -5.7 | -3.2 | -2.0 | -2.2 | -2.8 | -2.7 | ||||||||||||
| GG net debt/GDP | 19.7 | 19.7 | 19.8 | 28.5 | 37.4 | 39.9 | 40.6 | 42.8 | 43.6 | 44.1 | ||||||||||||
| CPI inflation | 0.7 | 1.1 | 0.7 | -0.9 | 1.2 | 6.1 | 1.6 | 2.0 | 1.5 | 1.3 | ||||||||||||
| Bank credit to resident private sector/GDP | 114.1 | 114.2 | 113.5 | 128.0 | 129.8 | 124.7 | 126.0 | 123.9 | 123.9 | 123.5 | ||||||||||||
| 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. | ||||||||||||||||||||||
Vietnam (BB+/Stable/B)
- Analyst: rain.yin@spglobal.com
- Latest publication: Vietnam Ratings Affirmed At 'BB+/B'; Outlook Stable, June 15, 2023
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 expectation that over the next 24 months, Vietnam's economy will recover when global demand picks up and the country gradually resolves its domestic challenges. This should keep the government's debt repayment burden stable.
Downside scenario
We may lower the ratings if economic conditions deteriorate rapidly or considerable stress in the country's banking system emerges such that the government's fiscal position weakens, 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 changes in the policy environment could further bolster investor confidence in the country's economic and financial stability.
Table 23
| Vietnam | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023e | 2024e | 2025e | 2026e | |||||||||||||
| GDP per capita (in ‘000) | 3.0 | 3.3 | 3.5 | 3.6 | 3.7 | 4.1 | 4.2 | 4.7 | 5.1 | 5.6 | ||||||||||||
| GDP growth | 6.9 | 7.5 | 7.4 | 2.9 | 2.6 | 8.0 | 4.6 | 6.5 | 6.8 | 6.6 | ||||||||||||
| GDP per capita growth | 5.8 | 6.3 | 5.3 | 1.7 | 1.6 | 6.9 | 3.5 | 5.5 | 5.7 | 5.5 | ||||||||||||
| Current account balance/GDP | -0.6 | 1.9 | 3.9 | 4.3 | -1.0 | 1.2 | 1.2 | 1.2 | 1.6 | 2.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 97.3 | 93.1 | 90.4 | 85.9 | 89.0 | 87.4 | 91.9 | 91.1 | 90.6 | 90.2 | ||||||||||||
| Narrow net external debt/CAR | 34.5 | 29.1 | 23.2 | 18.1 | 18.6 | 24.5 | 23.1 | 22.6 | 22.0 | 21.3 | ||||||||||||
| GG balance/GDP | -2.0 | -1.0 | -0.4 | -2.9 | -3.4 | -3.6 | -4.5 | -4.0 | -3.7 | -3.6 | ||||||||||||
| GG net debt/GDP | 37.1 | 33.6 | 30.6 | 32.2 | 31.9 | 31.9 | 33.9 | 34.6 | 34.8 | 35.0 | ||||||||||||
| CPI inflation | 3.5 | 3.5 | 2.8 | 3.2 | 1.8 | 3.2 | 3.0 | 3.1 | 3.3 | 3.2 | ||||||||||||
| Bank credit to resident private sector/GDP | 104.0 | 105.3 | 108.0 | 115.5 | 124.4 | 125.3 | 131.6 | 135.4 | 139.0 | 143.0 | ||||||||||||
| 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. | ||||||||||||||||||||||
Related Research
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- Global Sovereign Rating Trends Midyear 2023: Fragile Stability, July 6, 2023Economic Outlook Asia-Pacific Q3 2023: Domestic Demand, Inflation Relief Support Asia's Outlook, June 26, 2023
- Sovereign Ratings Score Snapshot, June 7, 2023
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- Sovereign Risk Indicators, April 10, 2023 (An interactive version of the Sovereign Risk Indicators can be found at www.spratings.com/SRI)
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- Asia-Pacific Sovereign Rating Trends 2023: A Break In The Weather, Jan. 27, 2023
| 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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