This report does not constitute a rating action.
Key Takeaways
- Economic and financial conditions should allow us to maintain ratings on most sovereigns in Asia-Pacific in the next one to two years.
- A worsening of the conflicts in Ukraine and the Middle East remains an important risk to sovereign outlooks in the Asia-Pacific.
- A sudden deterioration in U.S.-China tensions is another risk. In the runup to the U.S. presidential election in November, accidental contacts between the countries' armed forces in the Pacific has a higher chance of causing political and economic damage.
Rating Outlook And Trends
Outlooks on most Asia-Pacific sovereigns remain stable
Sovereign credit trends in Asia-Pacific were little changed in the first half of 2024, with only one rating action in the period. In late May, we revised the outlook on India to positive from stable. The change reflected our view that policy settings in India will sustain long-term economic growth, improving the government's fiscal and debt metrics.
Sri Lanka has made much progress toward restructuring its external debts. By mid-July, the government had reached restructuring deals with official creditors and international bondholders. If the official creditors and the International Monetary Fund (IMF) clear the agreement with international bondholders, the government will have a template for negotiations with remaining creditors. This could expedite restructuring, opening a path from default.
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, the average rating edged lower as we revised the outlook on Bangladesh to negative, but has reversed with the recent revision of the outlook on India to positive (see chart 3).
Chart 2
The stable outlooks on most long-term foreign-currency sovereign ratings in the region (18 out of 21 ratings in Asia-Pacific) suggest there will be few changes in the next year or so. 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. There is no outlook on Sri Lanka because it is in default.
The absence of major economic or financial surprises has underpinned sovereign rating stability so far in 2024. Our latest economic growth forecast for Asia-Pacific remains little changed from that in late 2023, with positive revisions for some of the larger economies offsetting negative changes in Southeast Asia. Inflationary pressures are steady despite a moderate rise in crude oil prices since the end of 2023. Financing costs have also stabilized even though policy rate cuts in the advanced economies are coming later than we previously expected.
Chart 3
Superior economic growth underpins sovereign credit quality
Strong economic growth will likely support Asia-Pacific sovereign credit quality. The IMF's latest economic outlook in July continued to project emerging and developing Asian growth rates in the next two years will be well above the global average of the same period. In 2024, the larger economies in the region are likely to see growth moderating from the post-pandemic rebound in 2023. Smaller and export-oriented economies, however, should see stronger growth performance due to the recovery of exports this year.
In a few cases where governments took office after elections in the past one and a half years, investors have increased their focus on fiscal policy. This includes in markets such as India, where the ruling Bharatiya Janata Party (BJP) lost its parliamentary majority. In Indonesia, President-elect Prabowo has signaled that he is likely to increase the government debt ratio. And in Thailand, more than a year after it took office, the government is beginning to roll out its Digital Wallet scheme.
All three sovereigns concerned have sufficent buffers in their credit metrics to absorb some fiscal deteriorations at the respective rating levels on them. The current ratings on Thailand already incorporate the potential for significant deterioration in fiscal performance as a result of political uncertainty. Our fiscal and debt assessments currently offer very weak support for our ratings on India. Unless the deterioration in fiscal settings is very serious, we do not expect the sovereign rating on India to fall below investment grade.
Moreover, we do not expect recent parliamentary election results to have a major negative impact on the prospects for fiscal improvements in India. Tax revenue in the country has risen to its highest level in more than 10 years. The increased revenue has allowed the government to raise government investment to about 4% of GDP, the highest in more than 10 years. We expect the new BJP government to sustain these improvements, even if it is no longer the majority party in parliament. In the next two to three years, these trends are likley to result in a reduced deficit. Consequently, we maintain a positive outlook on the India sovereign ratings.
Indonesia's pragmatic policymakers and continued industrialization should stabilize credit metrics. The incoming government reportedly intends to increase the debt ratio to 50% of GDP, from the current 39%, if it can increase tax revenue. In our view, this early announcement reflects Indonesian policymakers' continued focus on investor confidence in the country. We believe the incoming government will not weaken fiscal performance to the extent that it hits financial markets.
Furthermore, Indonesia's likely increase in its export of higher-grade nickel and electric vehicle (EV) batteries may improve external metrics to offset potential fiscal slippage. Nevertheless, if Indonesian export growth disapppoints and annual fiscal deficits stay above 3% of GDP, this may erode the the ratings buffer on the sovereign.
Fiscal performance is also a credit challenge in China. Government debt issuance in 2024 remains high despite a post-pandemic recovery of consumer activity. The government continues to provide strong fiscal support for the economy to offset the negative impact of deleveraging policy in the real estate and local government sectors. Some of these debts were also issued to refinance more costly off-balance sheet borrowings related to local governments.
Our ratings on China remain supported at the 'A+' level due to favorable financing conditions. China's credible monetary policy settings and large domestic savings help to head off immediate pressures on the sovereign ratings. Despite the larger size of government debt issuances, long-term government bond yields have dipped significantly this year. Credit support for China, however, could still weaken if the economic recovery is not strong enough in the next two to three years to allow the government to repair its balance sheet by bringing down fiscal deficits.
Geopolitical risks to regional sovereign creditworthiness remain
A worsening of the conflict in Ukraine or that of the Middle East remains an important risk to 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.
A sudden deterioration in U.S.-China tensions is another risk. In the runup to the U.S. presidential election in November, accidental contacts between the countries' armed forces in the Pacific have a higher chance of causing political and economic damage. This could in turn affect regional sovereign credit metrics.
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 | 1 | 1 | 1 | |||||||||
| Bangladesh | BB-/Negative/B | 5 | 4 | 3 | 6 | 5 | 4 | |||||||||
| China | A+/Stable/A-1 | 3 | 3 | 1 | 5* | 4 | 2§ | |||||||||
| 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-/Positive/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 | 5§ | 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 | 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 | 3§ | 4 | |||||||||
| 1 (%) | 14 | 29 | 43 | 19 | 14 | 14 | ||||||||||
| 2 (%) | 5 | 5 | 5 | 5 | 10 | 33 | ||||||||||
| 3 (%) | 33 | 10 | 19 | 19 | 14 | 14 | ||||||||||
| 4 (%) | 14 | 33 | 0 | 24 | 24 | 19 | ||||||||||
| 5 (%) | 24 | 14 | 14 | 10 | 10 | 14 | ||||||||||
| 6 (%) | 10 | 10 | 19 | 24 | 29 | 5 | ||||||||||
| Median | 3 | 4 | 3 | 4 | 4 | 3 | ||||||||||
| Mean | 3.6 | 3.3 | 3 | 3.6 | 4 | 3.1 | ||||||||||
| Standard deviation | 1.5 | 1.7 | 2.1 | 1.8 | 1.8 | 1.5 | ||||||||||
| *Deterioration since December 2023. §Improvement since December 2023. Source: S&P Global Ratings. | ||||||||||||||||
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 (%) | ||||||||||||||||||
| 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | |||||||||||||
| Australia | 1.4 | 1.6 | (0.4) | (1.1) | 23.9 | 24.3 | (1.4) | (2.5) | 205.9 | 207.9 | ||||||||||||
| Bangladesh | 6.0 | 6.3 | (5.0) | (4.8) | 32.0 | 33.5 | (0.3) | (0.5) | 81.2 | 79.2 | ||||||||||||
| China | 4.8 | 4.6 | (3.0) | (2.8) | 51.9 | 54.1 | 2.1 | 2.1 | (68.4) | (67.8) | ||||||||||||
| Cook Islands | 11.5 | 4.4 | (3.2) | (1.6) | 32.2 | 32.4 | N.A. | N.A. | N.A. | N.A. | ||||||||||||
| Fiji | 3.5 | 3.0 | (5.0) | (3.6) | 69.9 | 70.1 | (9.3) | (8.3) | 42.4 | 46.6 | ||||||||||||
| Hong Kong | 3.3 | 2.9 | (4.6) | (2.5) | (13.9) | (10.8) | 11.6 | 8.4 | (59.9) | (56.7) | ||||||||||||
| India | 6.8 | 6.9 | (7.9) | (7.3) | 84.1 | 83.2 | (1.3) | (1.5) | (4.7) | (4.2) | ||||||||||||
| Indonesia | 5.0 | 5.0 | (2.2) | (2.6) | 35.4 | 35.3 | (0.7) | (0.9) | 69.7 | 63.7 | ||||||||||||
| Japan | 1.3 | 0.7 | (5.8) | (5.0) | 156.6 | 157.2 | 2.7 | 2.3 | (55.0) | (44.3) | ||||||||||||
| Korea | 2.6 | 2.4 | (1.0) | (0.6) | 8.5 | 8.5 | 4.8 | 5.0 | (17.7) | (13.5) | ||||||||||||
| Malaysia | 4.3 | 4.5 | (3.9) | (3.5) | 70.0 | 69.1 | 2.4 | 2.2 | 25.6 | 23.2 | ||||||||||||
| Mongolia | 6.0 | 6.2 | (2.0) | (2.4) | 34.3 | 33.7 | (2.2) | (2.7) | 71.2 | 62.4 | ||||||||||||
| New Zealand | 0.1 | 2.1 | (5.0) | (2.7) | 32.0 | 32.8 | (5.6) | (5.0) | 196.1 | 191.8 | ||||||||||||
| Pakistan | 2.0 | 3.2 | (7.5) | (6.3) | 67.0 | 68.3 | (1.6) | (1.2) | 157.0 | 157.7 | ||||||||||||
| Papua New Guinea | 4.0 | 3.9 | (3.5) | (2.8) | 47.0 | 46.9 | 13.5 | 13.5 | 100.6 | 108.6 | ||||||||||||
| Philippines | 5.8 | 6.1 | (3.2) | (2.7) | 43.9 | 42.8 | (1.2) | (1.4) | (5.2) | (4.4) | ||||||||||||
| Singapore | 2.2 | 2.5 | 2.0 | 2.5 | (59.4) | (59.1) | 17.3 | 16.4 | (105.6) | (111.2) | ||||||||||||
| Sri Lanka | 2.0 | 2.6 | (8.5) | (7.5) | 103.7 | 104.5 | 0.1 | (0.6) | 143.4 | 132.8 | ||||||||||||
| Taiwan | 4.0 | 2.1 | (1.0) | (1.1) | 26.9 | 27.0 | 14.1 | 13.5 | (128.6) | (126.2) | ||||||||||||
| Thailand | 3.4 | 3.3 | (2.9) | (3.4) | 41.4 | 42.5 | 1.9 | 2.4 | (22.6) | (21.2) | ||||||||||||
| Vietnam | 5.8 | 6.7 | (3.5) | (3.6) | 26.9 | 27.6 | 5.4 | 3.4 | 15.3 | 13.5 | ||||||||||||
| Note: GDP growth for India and Japan are for fiscal years. For India, 2024 = FY2024/25, 2025 = FY2025/26. GG--General government. CAR--Current account receipts. N.A.--Not available. Source: S&P Global Ratings. | ||||||||||||||||||||||
Australia (AAA/Stable/A-1+)
- Analyst: martin.foo@spglobal.com
- Latest publication: (Full Analysis) Australia, Feb. 12, 2024
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 on Australia reflects our expectation that the general government deficit and net debt will remain modest over the next two years. Australia's external accounts will likely be stronger than in the past, despite a softening current account balance.
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 perform below our forecasts.
Table 3
| Australia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 57.3 | 55.0 | 51.8 | 60.7 | 65.2 | 64.7 | 64.5 | 67.9 | 72.7 | 76.9 | ||||||||||||
| GDP growth | 2.9 | 2.2 | (0.3) | 2.1 | 4.3 | 3.1 | 1.4 | 1.6 | 2.4 | 2.4 | ||||||||||||
| GDP per capita growth | 1.4 | 0.7 | (1.6) | 2.0 | 3.0 | 0.6 | (1.0) | (0.4) | 0.5 | 0.8 | ||||||||||||
| Current account balance/GDP | (2.8) | (0.9) | 1.4 | 3.0 | 1.8 | 0.6 | (1.4) | (2.5) | (2.8) | (2.8) | ||||||||||||
| Gross external financing needs/CAR&FXR | 234.9 | 224.6 | 221.4 | 223.3 | 201.9 | 208.2 | 214.9 | 227.5 | 219.2 | 218.4 | ||||||||||||
| Narrow net external debt/CAR | 269.1 | 256.4 | 273.1 | 285.3 | 199.6 | 186.8 | 205.9 | 207.9 | 194.6 | 189.8 | ||||||||||||
| GG balance/GDP | (1.0) | (0.7) | (6.8) | (8.6) | (3.7) | (0.2) | (0.4) | (1.1) | (1.1) | (0.6) | ||||||||||||
| GG net debt/GDP | 12.5 | 11.8 | 19.4 | 26.7 | 27.4 | 25.1 | 23.9 | 24.3 | 24.3 | 23.9 | ||||||||||||
| CPI inflation | 1.9 | 1.7 | 1.3 | 1.6 | 4.5 | 7.0 | 4.2 | 3.8 | 2.9 | 2.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 156.2 | 153.3 | 175.6 | 167.8 | 165.9 | 156.8 | 153.6 | 154.1 | 154.3 | 154.7 | ||||||||||||
| 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. | ||||||||||||||||||||||
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 24, 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 2.0 | 2.1 | 2.3 | 2.5 | 2.6 | 2.5 | 2.6 | 2.9 | 3.1 | 3.4 | ||||||||||||
| GDP growth | 7.3 | 7.9 | 3.5 | 6.9 | 7.1 | 5.8 | 6.0 | 6.3 | 6.4 | 6.4 | ||||||||||||
| GDP per capita growth | 6.2 | 6.8 | 2.4 | 5.7 | 5.9 | 4.6 | 4.8 | 5.1 | 5.2 | 5.2 | ||||||||||||
| Current account balance/GDP | (3.0) | (1.3) | (1.5) | (1.1) | (4.2) | (0.6) | (0.3) | (0.5) | (0.4) | (0.2) | ||||||||||||
| Gross external financing needs/CAR&FXR | 83.8 | 83.4 | 88.3 | 83.7 | 93.9 | 87.4 | 98.0 | 99.9 | 97.0 | 93.4 | ||||||||||||
| Narrow net external debt/CAR | 33.7 | 49.7 | 52.5 | 48.3 | 63.9 | 84.4 | 81.2 | 79.2 | 77.0 | 75.1 | ||||||||||||
| GG balance/GDP | (4.8) | (4.7) | (4.8) | (3.7) | (4.6) | (4.6) | (5.0) | (4.8) | (4.8) | (4.8) | ||||||||||||
| GG net debt/GDP | 20.3 | 21.8 | 23.7 | 25.1 | 28.1 | 30.1 | 32.0 | 33.5 | 35.1 | 36.5 | ||||||||||||
| CPI inflation | 5.5 | 5.5 | 6.0 | 5.4 | 7.8 | 6.8 | 6.0 | 6.0 | 6.0 | 6.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 40.4 | 39.5 | 39.6 | 39.6 | 39.6 | 38.4 | 38.3 | 38.5 | 38.9 | 39.3 | ||||||||||||
| 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. | ||||||||||||||||||||||
China (A+/Stable/A-1)
- Analyst: kimeng.tan@spglobal.com
- Latest publication: China Ratings Affirmed At 'A+/A-1'; Outlook Stable, June 27, 2024
Rating score snapshot:
- Institutional assessment: 3
- Economic assessment: 3
- External assessment: 1
- Fiscal assessment – Flexibility and performance: 5
- Fiscal assessment – Debt burden: 4
- Monetary assessment: 2
Outlook: Stable
The stable outlook on the long-term rating reflects our view that China will return to self-sustaining economic growth of 4% or more annually over the next one to two years. This will allow for a decline in the rate of annual increases in net general government debt toward 4% of GDP on a consistent basis.
Downside scenario
We could lower the ratings if we believe the government will continue with strong fiscal stimulus over the next three to five years. This would likely reflect in more persistent downward pressure on economic growth than we currently expect. The resulting fiscal impact would cause the net change in general government debt to stay close to, or above, 6% of GDP annually.
We could also lower the ratings if we believe the amount of contingent liabilities that would crystallize on the balance sheets of local governments will significantly exceed what we currently assume, pushing net general government debt toward and beyond 80% of GDP.
Upside scenario
We may raise our ratings on China if fiscal consolidation is faster than what we anticipate, resulting in a persistent decline in net general government debt to below 30% of GDP, or government interest payments falling below 5% of revenue consistently or both.
Table 5
| China | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 9.9 | 10.1 | 10.4 | 12.6 | 12.7 | 12.6 | 13.0 | 14.1 | 15.3 | 16.6 | ||||||||||||
| GDP growth | 6.8 | 6.0 | 2.4 | 8.1 | 3.0 | 5.2 | 4.8 | 4.6 | 4.6 | 4.4 | ||||||||||||
| GDP per capita growth | 6.4 | 5.6 | 2.2 | 8.1 | 3.1 | 5.4 | 4.9 | 4.7 | 4.7 | 4.5 | ||||||||||||
| Current account balance/GDP | 0.2 | 0.7 | 1.7 | 2.0 | 2.3 | 2.3 | 2.1 | 2.1 | 2.1 | 2.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 60.5 | 61.0 | 57.4 | 60.7 | 60.5 | 61.0 | 61.1 | 63.5 | 63.7 | 63.8 | ||||||||||||
| Narrow net external debt/CAR | (78.0) | (79.6) | (76.6) | (55.8) | (59.4) | (60.0) | (68.4) | (67.8) | (65.5) | (63.9) | ||||||||||||
| GG balance/GDP | (2.8) | (4.3) | (9.5) | (4.8) | (6.5) | (3.8) | (3.0) | (2.8) | (2.6) | (2.4) | ||||||||||||
| GG net debt/GDP | 28.8 | 30.0 | 36.3 | 37.4 | 41.9 | 46.9 | 51.9 | 54.1 | 55.3 | 56.1 | ||||||||||||
| CPI inflation | 2.1 | 2.9 | 2.5 | 0.9 | 2.0 | 0.2 | 0.5 | 1.5 | 1.9 | 2.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 186.0 | 190.4 | 206.7 | 198.8 | 207.4 | 216.9 | 224.7 | 227.3 | 229.9 | 233.0 | ||||||||||||
| 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. | ||||||||||||||||||||||
Cook Islands (B+/Stable/B)
- Analyst: anthony.walker@spglobal.com
- Latest publication: Cook Islands 'B+/B' Ratings Affirmed; Outlook Stable, July 11, 2024
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 rise in debt increases the interest burden to more than 5% of government revenues.
Upside scenario
We could raise our ratings if there is a sustained strengthening of the government's fiscal outlook or economic wealth and diversification.
Table 6
| Cook Islands | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 22.7 | 21.5 | 18.0 | 17.4 | 16.6 | 19.2 | 21.6 | 22.4 | 23.8 | 25.2 | ||||||||||||
| GDP growth | 8.9 | 5.3 | (5.2) | (19.0) | 1.6 | 13.3 | 11.5 | 4.4 | 3.3 | 3.5 | ||||||||||||
| GDP per capita growth | 6.9 | (2.1) | (9.5) | (15.7) | 12.0 | 19.4 | 10.6 | 3.6 | 2.5 | 2.7 | ||||||||||||
| Current account balance/GDP | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | N/A | N/A | N/A | N/A | ||||||||||||
| 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 | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N/A | N/A | N/A | N/A | ||||||||||||
| GG balance/GDP | 4.1 | 5.0 | (6.3) | (23.1) | (8.8) | (2.7) | (3.2) | (1.6) | (1.3) | (1.2) | ||||||||||||
| GG net debt/GDP | (7.5) | (2.7) | 2.4 | 24.5 | 37.6 | 33.4 | 32.2 | 32.4 | 32.2 | 31.7 | ||||||||||||
| CPI inflation | 0.4 | 0.0 | 0.7 | 2.2 | 4.2 | 13.0 | 4.4 | 2.6 | 2.4 | 2.4 | ||||||||||||
| Bank credit to resident private sector/GDP | 45.5 | 41.6 | 46.7 | 53.1 | 53.9 | 45.5 | 39.6 | 37.9 | 36.1 | 34.3 | ||||||||||||
| 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. | ||||||||||||||||||||||
Fiji (B+/Stable/B)
- Analyst: anthony.walker@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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 6.3 | 6.1 | 4.9 | 4.8 | 5.5 | 6.1 | 6.6 | 6.8 | 7.1 | 7.4 | ||||||||||||
| GDP growth | 3.8 | (0.6) | (17.0) | (4.9) | 20.0 | 8.2 | 3.5 | 3.0 | 3.0 | 3.0 | ||||||||||||
| GDP per capita growth | 3.2 | (1.2) | (17.5) | (5.5) | 19.3 | 7.6 | 2.8 | 2.4 | 2.4 | 2.4 | ||||||||||||
| Current account balance/GDP | (8.5) | (12.8) | (13.9) | (15.9) | (17.3) | (14.0) | (9.3) | (8.3) | (7.2) | (6.0) | ||||||||||||
| Gross external financing needs/CAR&FXR | 101.1 | 111.3 | 109.3 | 108.2 | 102.2 | 106.3 | 112.5 | 117.6 | 120.9 | 121.6 | ||||||||||||
| Narrow net external debt/CAR | 3.5 | 9.8 | 25.8 | 14.6 | 27.7 | 37.3 | 42.4 | 46.6 | 48.0 | 47.4 | ||||||||||||
| GG balance/GDP | (4.3) | (3.6) | (6.6) | (11.8) | (11.2) | (6.7) | (5.0) | (3.6) | (3.5) | (3.5) | ||||||||||||
| GG net debt/GDP | 40.1 | 44.1 | 63.8 | 78.0 | 75.3 | 70.8 | 69.9 | 70.1 | 70.1 | 70.1 | ||||||||||||
| CPI inflation | 4.1 | 1.8 | (2.6) | 0.2 | 4.5 | 3.0 | 2.5 | 2.6 | 2.8 | 2.8 | ||||||||||||
| Bank credit to resident private sector/GDP | 71.1 | 73.4 | 88.5 | 96.3 | 83.3 | 78.8 | 77.3 | 78.6 | 80.0 | 81.3 | ||||||||||||
| 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: kimeng.tan@spglobal.com
- Latest publication: Hong Kong Ratings Affirmed At 'AA+/A-1+'; Outlook Stable, May 7, 2024
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 economic prospects.
Table 8
| Hong Kong | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 48.5 | 48.4 | 46.1 | 49.8 | 48.8 | 50.5 | 53.8 | 56.4 | 59.3 | 62.1 | ||||||||||||
| GDP growth | 2.9 | (1.7) | (6.5) | 6.5 | (3.7) | 3.3 | 3.3 | 2.9 | 2.5 | 2.2 | ||||||||||||
| GDP per capita growth | 2.0 | (2.4) | (6.2) | 7.4 | (2.8) | 0.7 | 3.2 | 2.8 | 2.5 | 2.2 | ||||||||||||
| Current account balance/GDP | 3.7 | 5.9 | 7.0 | 11.8 | 10.2 | 9.2 | 11.6 | 8.4 | 9.2 | 9.2 | ||||||||||||
| Gross external financing needs/CAR&FXR | 177.8 | 188.3 | 187.7 | 180.2 | 188.2 | 188.1 | 184.2 | 183.6 | 182.8 | 181.9 | ||||||||||||
| Narrow net external debt/CAR | (59.1) | (62.8) | (71.4) | (56.9) | (67.8) | (69.4) | (59.9) | (56.7) | (53.7) | (50.9) | ||||||||||||
| GG balance/GDP | 2.4 | (0.6) | (9.4) | 0.0 | (6.7) | (5.8) | (4.6) | (2.5) | (1.4) | 0.0 | ||||||||||||
| GG net debt/GDP | (42.0) | (41.3) | (34.7) | (32.5) | (26.7) | (19.7) | (13.9) | (10.8) | (8.9) | (8.5) | ||||||||||||
| CPI inflation | 2.3 | 2.9 | 0.3 | 1.5 | 1.9 | 2.1 | 1.7 | 1.8 | 1.9 | 2.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 232.7 | 248.1 | 268.3 | 262.2 | 268.3 | 250.2 | 247.3 | 248.1 | 248.0 | 248.9 | ||||||||||||
| 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. | ||||||||||||||||||||||
India (BBB-/Positive/A-3)
- Analyst: yeefarn.phua@spglobal.com
- Latest publication: India Outlook Revised To Positive On Robust Growth And Rising Quality Of Government Spend; 'BBB-/A-3' Ratings Affirmed, May 29, 2024
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: Positive
The positive outlook reflects our view that continued policy stability, deepening economic reforms, and high infrastructure investment will sustain long-term growth prospects. That, along with cautious fiscal and monetary policy that diminishes the government's elevated debt and interest burden while bolstering economic resilience, could lead to a higher rating over the next 24 months.
Upside scenario
We may raise the ratings if India's fiscal deficits narrow meaningfully such that the net change in general government debt falls below 7% of GDP on a structural basis. The protracted rise in public investment in infrastructure will lift economic growth dynamism that, combined with fiscal adjustments, could alleviate India's weak public finances.
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.
Downside scenario
We could revise the outlook to stable if we observe an erosion of political commitment to maintain sustainable public finances, which in turn signifies a weakening of the country's institutional capacity.
If current-account deficits widen materially to weaken India's external position such that the country becomes a narrow net external debtor, we could also revise the outlook to stable.
Table 9
| India | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 2.0 | 2.1 | 1.9 | 2.3 | 2.4 | 2.5 | 2.7 | 3.0 | 3.2 | 3.5 | ||||||||||||
| GDP growth | 6.5 | 3.9 | (5.8) | 9.7 | 7.0 | 8.2 | 6.8 | 6.9 | 7.0 | 7.0 | ||||||||||||
| GDP per capita growth | 5.4 | 2.8 | (6.7) | 8.9 | 6.2 | 7.3 | 5.8 | 6.0 | 6.1 | 6.1 | ||||||||||||
| Current account balance/GDP | (2.1) | (0.9) | 0.9 | (1.2) | (2.0) | (0.8) | (1.3) | (1.5) | (1.6) | (1.7) | ||||||||||||
| Gross external financing needs/CAR&FXR | 86.7 | 83.8 | 74.5 | 76.9 | 81.0 | 80.6 | 82.2 | 83.2 | 84.4 | 85.5 | ||||||||||||
| Narrow net external debt/CAR | 10.3 | 2.0 | (17.0) | (12.5) | (5.1) | (5.0) | (4.7) | (4.2) | (4.1) | (3.8) | ||||||||||||
| GG balance/GDP | (6.6) | (7.8) | (13.4) | (8.8) | (9.6) | (8.6) | (7.9) | (7.3) | (7.0) | (6.8) | ||||||||||||
| GG net debt/GDP | 71.5 | 76.5 | 90.8 | 85.5 | 83.0 | 84.3 | 84.1 | 83.2 | 81.9 | 80.7 | ||||||||||||
| CPI inflation | 3.4 | 4.8 | 6.2 | 5.5 | 6.7 | 5.4 | 4.5 | 4.6 | 4.6 | 4.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 52.7 | 52.8 | 56.4 | 51.5 | 51.0 | 52.1 | 52.3 | 52.4 | 52.3 | 52.4 | ||||||||||||
| 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. | ||||||||||||||||||||||
Indonesia (BBB/Stable/A-2)
- Analyst: kimeng.tan@spglobal.com
- Latest publication: (Full Analysis) Indonesia, April 21, 2024
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 exert 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 lead to upward pressure on the ratings.
Table 10
| Indonesia | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 3.9 | 4.1 | 3.9 | 4.3 | 4.8 | 4.9 | 5.0 | 5.4 | 5.8 | 6.2 | ||||||||||||
| GDP growth | 5.2 | 5.0 | (2.1) | 3.7 | 5.3 | 5.1 | 5.0 | 5.0 | 4.9 | 4.9 | ||||||||||||
| GDP per capita growth | 4.0 | 3.9 | (3.1) | 3.0 | 4.6 | 4.3 | 4.2 | 4.2 | 4.1 | 4.1 | ||||||||||||
| Current account balance/GDP | (2.9) | (2.7) | (0.4) | 0.3 | 1.0 | (0.1) | (0.7) | (0.9) | (1.0) | (0.9) | ||||||||||||
| Gross external financing needs/CAR&FXR | 95.9 | 98.2 | 88.6 | 87.0 | 86.2 | 90.3 | 91.4 | 90.9 | 91.1 | 90.7 | ||||||||||||
| Narrow net external debt/CAR | 100.9 | 115.6 | 132.6 | 90.4 | 66.9 | 72.1 | 69.7 | 63.7 | 59.2 | 55.2 | ||||||||||||
| GG balance/GDP | (1.7) | (2.1) | (6.1) | (4.4) | (2.2) | (1.7) | (2.2) | (2.6) | (2.5) | (2.5) | ||||||||||||
| GG net debt/GDP | 27.2 | 27.6 | 35.7 | 37.6 | 36.2 | 35.7 | 35.4 | 35.3 | 35.1 | 35.0 | ||||||||||||
| CPI inflation | 3.1 | 2.8 | 2.0 | 1.6 | 4.2 | 3.7 | 2.8 | 3.0 | 3.1 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 36.0 | 35.7 | 36.2 | 34.4 | 32.8 | 33.3 | 34.1 | 34.6 | 35.2 | 35.8 | ||||||||||||
| 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. | ||||||||||||||||||||||
Japan (A+/Stable/A-1)
- Analyst: rain.yin@spglobal.com
- Last publication: Japan 'A+/A-1' Ratings Affirmed; Outlook Stable, March 28, 2024
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 expectation that the Bank of Japan's monetary policy change should not affect economic growth or financial market stability. Over fiscal years 2024-2027, we expect average real GDP per capita growth of about 1.5% and nominal GDP growth of about 3.2% a year. Higher spending on interest payments, social security, and national defense should 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 believe the credibility of monetary policy has improved, characterized by more predictable policy actions, while expectations of low, positive, and stable inflation in Japan become well-entrenched.
Table 11
| Japan | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 39.9 | 40.5 | 40.2 | 40.3 | 34.5 | 34.2 | 33.1 | 37.6 | 41.7 | 44.9 | ||||||||||||
| GDP growth | 0.3 | (0.8) | (3.9) | 2.8 | 1.6 | 1.2 | 1.3 | 0.7 | 1.0 | 0.8 | ||||||||||||
| GDP per capita growth | 0.5 | (0.6) | (3.5) | 3.0 | 2.0 | 1.7 | 1.9 | 1.3 | 1.6 | 1.4 | ||||||||||||
| Current account balance/GDP | 3.5 | 3.5 | 3.0 | 3.9 | 2.0 | 3.6 | 2.7 | 2.3 | 2.0 | 2.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 168.3 | 180.4 | 188.4 | 197.0 | 186.2 | 202.9 | 200.7 | 197.2 | 194.6 | 193.2 | ||||||||||||
| Narrow net external debt/CAR | (81.8) | (82.9) | (101.2) | (89.0) | (47.6) | (57.4) | (55.0) | (44.3) | (29.9) | (23.7) | ||||||||||||
| GG balance/GDP | (2.4) | (3.1) | (10.0) | (5.9) | (3.6) | (8.0) | (5.8) | (5.0) | (4.2) | (4.5) | ||||||||||||
| GG net debt/GDP | 146.9 | 150.5 | 160.8 | 161.7 | 160.1 | 156.1 | 156.6 | 157.2 | 156.6 | 156.6 | ||||||||||||
| CPI inflation | 0.9 | 0.5 | 0.0 | 0.0 | 2.3 | 3.2 | 2.4 | 2.1 | 1.8 | 1.8 | ||||||||||||
| Bank credit to resident private sector/GDP | 146.9 | 153.3 | 166.5 | 167.9 | 166.8 | 164.1 | 161.7 | 160.3 | 158.5 | 157.1 | ||||||||||||
| 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: Korea 'AA/A-1+' Ratings Affirmed; Outlook Stable, April 30, 2024
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 for at least the next three to five years. We also anticipate that the general government deficit will remain low over the next three years.
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 South Korea if we believe geopolitical tensions related to North Korea would intensify to a point that they would seriously damage South Korea's economic, fiscal, or external performances.
Additionally, we may downgrade the sovereign if we expect the average income level in Korea to fall significantly below that of other high-income economies for a prolonged period. This may happen if the value of economic output in the Korean economy falls sharply and persistently relative to those of its peers.
Upside scenario
We may raise the sovereign ratings on South Korea if the security and contingent liability risks posed by North Korea recede. This may happen if sanctions on North Korea ease to allow its economy to begin to integrate with the global economy.
Table 12
| Korea | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 35.4 | 33.8 | 33.7 | 37.5 | 34.8 | 35.6 | 36.9 | 40.2 | 43.6 | 46.6 | ||||||||||||
| GDP growth | 3.2 | 2.3 | (0.7) | 4.6 | 2.7 | 1.4 | 2.6 | 2.4 | 2.0 | 2.0 | ||||||||||||
| GDP per capita growth | 2.7 | 2.0 | (0.8) | 4.8 | 2.9 | 1.3 | 2.7 | 2.5 | 2.1 | 2.1 | ||||||||||||
| Current account balance/GDP | 4.3 | 3.4 | 4.4 | 4.4 | 1.4 | 1.9 | 4.8 | 5.0 | 5.3 | 5.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 73.4 | 75.0 | 73.0 | 77.1 | 82.7 | 85.4 | 80.3 | 83.6 | 84.4 | 85.5 | ||||||||||||
| Narrow net external debt/CAR | (45.8) | (50.5) | (51.1) | (35.2) | (22.8) | (23.4) | (17.7) | (13.5) | (9.5) | (5.8) | ||||||||||||
| GG balance/GDP | 2.9 | 0.8 | (2.5) | (0.3) | 0.1 | (0.8) | (1.0) | (0.6) | (0.3) | 0.0 | ||||||||||||
| GG net debt/GDP | 6.0 | 3.2 | 4.0 | 4.2 | 10.3 | 8.6 | 8.5 | 8.5 | 8.2 | 7.6 | ||||||||||||
| CPI inflation | 1.5 | 0.4 | 0.5 | 2.5 | 5.1 | 3.6 | 2.7 | 2.2 | 2.0 | 2.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 143.5 | 149.7 | 162.8 | 166.6 | 169.8 | 169.7 | 167.3 | 168.0 | 170.2 | 172.9 | ||||||||||||
| 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. | ||||||||||||||||||||||
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, 2024
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 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 11.1 | 11.2 | 10.4 | 11.5 | 12.5 | 12.0 | 12.4 | 13.4 | 14.4 | 15.5 | ||||||||||||
| GDP growth | 4.8 | 4.4 | (5.5) | 3.3 | 8.9 | 3.6 | 4.3 | 4.5 | 4.4 | 4.4 | ||||||||||||
| GDP per capita growth | 3.7 | 4.0 | (5.2) | 2.9 | 8.6 | 1.3 | 3.2 | 3.4 | 3.4 | 3.4 | ||||||||||||
| Current account balance/GDP | 2.2 | 3.5 | 4.2 | 3.9 | 3.2 | 1.6 | 2.4 | 2.2 | 2.3 | 2.3 | ||||||||||||
| Gross external financing needs/CAR&FXR | 93.4 | 97.3 | 93.6 | 91.6 | 92.6 | 101.0 | 99.5 | 96.7 | 95.9 | 95.2 | ||||||||||||
| Narrow net external debt/CAR | 24.3 | 24.6 | 28.0 | 24.3 | 22.5 | 27.6 | 25.6 | 23.2 | 21.1 | 19.3 | ||||||||||||
| GG balance/GDP | (2.7) | (2.0) | (4.9) | (6.0) | (4.8) | (4.5) | (3.9) | (3.5) | (3.3) | (3.3) | ||||||||||||
| GG net debt/GDP | 56.2 | 58.9 | 69.6 | 70.1 | 66.2 | 70.4 | 70.0 | 69.1 | 68.3 | 67.6 | ||||||||||||
| CPI inflation | 0.9 | 0.7 | (1.1) | 2.5 | 3.4 | 2.5 | 2.8 | 2.6 | 2.5 | 2.4 | ||||||||||||
| Bank credit to resident private sector/GDP | 121.8 | 122.3 | 135.4 | 128.8 | 115.0 | 118.7 | 116.5 | 115.5 | 115.0 | 114.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 4.1 | 4.3 | 4.0 | 4.6 | 5.1 | 5.8 | 6.2 | 6.7 | 7.4 | 8.1 | ||||||||||||
| GDP growth | 7.6 | 5.5 | (4.4) | 1.6 | 5.0 | 7.1 | 6.0 | 6.2 | 6.3 | 6.3 | ||||||||||||
| GDP per capita growth | 5.6 | 3.6 | (6.1) | 0.1 | 3.5 | 5.7 | 4.4 | 4.6 | 4.7 | 4.7 | ||||||||||||
| Current account balance/GDP | (16.8) | (15.2) | (5.0) | (13.4) | (13.2) | 0.6 | (2.2) | (2.7) | (4.1) | (4.7) | ||||||||||||
| Gross external financing needs/CAR&FXR | 138.1 | 131.1 | 110.0 | 120.7 | 121.0 | 111.2 | 106.9 | 103.8 | 107.1 | 107.0 | ||||||||||||
| Narrow net external debt/CAR | 181.0 | 166.0 | 183.5 | 165.8 | 133.3 | 82.7 | 71.2 | 62.4 | 54.7 | 47.9 | ||||||||||||
| GG balance/GDP | 2.6 | 1.2 | (8.4) | (2.7) | 0.7 | 2.6 | (2.0) | (2.4) | (2.4) | (2.4) | ||||||||||||
| GG net debt/GDP | 74.3 | 63.8 | 78.0 | 66.9 | 61.6 | 42.1 | 34.3 | 33.7 | 32.5 | 31.5 | ||||||||||||
| CPI inflation | 6.8 | 7.3 | 3.8 | 7.4 | 15.2 | 10.4 | 8.0 | 7.5 | 7.5 | 7.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 56.9 | 50.4 | 47.9 | 49.3 | 43.2 | 41.4 | 45.2 | 48.5 | 49.9 | 51.4 | ||||||||||||
| 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. | ||||||||||||||||||||||
New Zealand (AA+/Stable/A-1+)
- Analyst: martin.foo@spglobal.com
Latest publication: (Full Analysis) New Zealand, April 15, 2024
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 a persistently weak current-account deficit 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 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 43.4 | 42.0 | 39.9 | 46.7 | 46.3 | 47.3 | 47.2 | 49.0 | 51.5 | 54.3 | ||||||||||||
| GDP growth | 3.5 | 3.3 | (0.8) | 6.1 | 0.7 | 3.0 | 0.1 | 2.1 | 2.5 | 2.5 | ||||||||||||
| GDP per capita growth | 1.6 | 1.6 | (2.8) | 5.1 | 0.5 | 1.8 | (2.6) | 0.5 | 1.1 | 1.1 | ||||||||||||
| Current account balance/GDP | (3.5) | (3.5) | (1.6) | (3.3) | (7.9) | (7.6) | (5.6) | (5.0) | (4.7) | (4.4) | ||||||||||||
| Gross external financing needs/CAR&FXR | 180.0 | 166.4 | 171.2 | 177.5 | 220.2 | 213.9 | 195.9 | 199.0 | 193.2 | 185.9 | ||||||||||||
| Narrow net external debt/CAR | 159.1 | 161.2 | 168.8 | 199.9 | 200.8 | 174.3 | 196.1 | 191.8 | 185.0 | 177.1 | ||||||||||||
| GG balance/GDP | 0.3 | (0.4) | (7.9) | (3.6) | (5.3) | (7.1) | (5.0) | (2.7) | (2.3) | (2.3) | ||||||||||||
| GG net debt/GDP | 17.8 | 15.7 | 24.1 | 20.5 | 27.8 | 28.8 | 32.0 | 32.8 | 33.2 | 33.5 | ||||||||||||
| CPI inflation | 1.5 | 1.7 | 1.8 | 1.9 | 8.9 | 6.0 | 4.5 | 2.2 | 2.4 | 2.4 | ||||||||||||
| Bank credit to resident private sector/GDP | 156.2 | 157.0 | 164.0 | 158.4 | 155.8 | 146.3 | 148.1 | 149.1 | 150.0 | 150.8 | ||||||||||||
| 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. | ||||||||||||||||||||||
Pakistan (CCC+/Stable/C)
- Analyst: yeefarn.phua@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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 1.7 | 1.5 | 1.4 | 1.6 | 1.7 | 1.5 | 1.5 | 1.5 | 1.6 | 1.7 | ||||||||||||
| GDP growth | 6.1 | 3.1 | (0.9) | 5.8 | 6.2 | (0.2) | 2.0 | 3.2 | 3.3 | 3.3 | ||||||||||||
| GDP per capita growth | 3.6 | 1.2 | (2.8) | 3.4 | 4.3 | (1.9) | 0.3 | 1.5 | 1.6 | 1.6 | ||||||||||||
| Current account balance/GDP | (5.4) | (4.2) | (1.5) | (0.8) | (4.7) | (1.0) | (1.6) | (1.2) | (1.2) | (1.3) | ||||||||||||
| Gross external financing needs/CAR&FXR | 131.3 | 145.4 | 137.8 | 116.7 | 124.7 | 124.4 | 134.9 | 125.0 | 123.6 | 122.3 | ||||||||||||
| Narrow net external debt/CAR | 135.8 | 158.8 | 163.7 | 142.0 | 144.3 | 162.3 | 157.0 | 157.7 | 156.2 | 154.3 | ||||||||||||
| GG balance/GDP | (5.8) | (7.9) | (7.1) | (6.1) | (7.9) | (7.8) | (7.5) | (6.3) | (5.8) | (5.8) | ||||||||||||
| GG net debt/GDP | 58.2 | 69.1 | 70.8 | 65.5 | 68.4 | 70.9 | 67.0 | 68.3 | 69.3 | 70.1 | ||||||||||||
| CPI inflation | 3.9 | 7.3 | 11.7 | 8.9 | 12.2 | 29.2 | 12.0 | 9.0 | 9.0 | 9.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 18.7 | 19.0 | 18.1 | 16.6 | 16.6 | 14.2 | 12.7 | 12.8 | 12.9 | 13.0 | ||||||||||||
| 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: martin.foo@spglobal.com
- Latest publication: Papua New Guinea 'B-/B' Ratings Affirmed; Outlook Stable, June 27, 2024
Rating score snapshot:
- Institutional assessment: 5
- Economic assessment: 6
- External assessment: 6
- Fiscal assessment – Flexibility and performance: 5
- Fiscal assessment – Debt burden: 6
- Monetary assessment: 5
Outlook: Stable
The stable outlook reflects our expectation that PNG will continue on 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 2.8 | 2.8 | 2.7 | 2.9 | 2.5 | 3.2 | 3.3 | 3.3 | 3.4 | 3.6 | ||||||||||||
| GDP growth | (0.3) | 4.5 | (3.2) | (0.8) | 5.2 | 2.0 | 4.0 | 3.9 | 3.5 | 3.5 | ||||||||||||
| GDP per capita growth | (2.2) | 2.5 | (5.0) | (2.8) | 3.0 | (0.1) | 1.9 | 1.8 | 1.4 | 1.4 | ||||||||||||
| Current account balance/GDP | 12.9 | 14.8 | 14.1 | 13.2 | 16.6 | 16.2 | 13.5 | 13.5 | 13.3 | 8.6 | ||||||||||||
| Gross external financing needs/CAR&FXR | 97.4 | 91.4 | 90.3 | 78.3 | 70.4 | 72.7 | 72.9 | 72.7 | 72.4 | 78.4 | ||||||||||||
| Narrow net external debt/CAR | 125.3 | 105.0 | 137.0 | 117.8 | 104.4 | 90.2 | 100.6 | 108.6 | 116.9 | 117.2 | ||||||||||||
| GG balance/GDP | (2.6) | (5.0) | (8.9) | (6.8) | (5.3) | (4.3) | (3.5) | (2.8) | (2.3) | (2.0) | ||||||||||||
| GG net debt/GDP | 27.6 | 36.4 | 43.7 | 46.8 | 41.6 | 45.9 | 47.0 | 46.9 | 45.8 | 44.8 | ||||||||||||
| CPI inflation | 4.4 | 3.9 | 4.9 | 4.5 | 5.3 | 2.3 | 4.2 | 4.8 | 4.8 | 4.6 | ||||||||||||
| Bank credit to resident private sector/GDP | 18.3 | 18.2 | 18.8 | 16.5 | 14.1 | 16.2 | 15.7 | 15.3 | 14.8 | 14.5 | ||||||||||||
| 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: (Full Analysis) Philippines, June 19, 2024
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, instead of the gradual improvements that we currently project.
Indications of downward pressure on the ratings would be annual changes in the net general government debt that are consistently 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 Philippines economy recovers much faster than we expect, and the government achieves more rapid fiscal consolidation. We may also raise the ratings if we assess significant improvements in the institutional settings, which had contributed to a significant enhancement in the Philippines' credit metrics over the decade before the pandemic.
Table 18
| Philippines | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 3.3 | 3.5 | 3.3 | 3.6 | 3.7 | 3.9 | 4.2 | 4.6 | 5.2 | 5.8 | ||||||||||||
| GDP growth | 6.3 | 6.1 | (9.5) | 5.7 | 7.6 | 5.6 | 5.8 | 6.1 | 6.5 | 6.4 | ||||||||||||
| GDP per capita growth | 4.7 | 4.6 | (11.2) | 4.9 | 6.7 | 4.7 | 4.2 | 4.6 | 5.0 | 5.0 | ||||||||||||
| Current account balance/GDP | (2.6) | (0.8) | 3.2 | (1.5) | (4.5) | (2.6) | (1.2) | (1.4) | (1.6) | (1.7) | ||||||||||||
| Gross external financing needs/CAR&FXR | 74.1 | 74.0 | 62.3 | 64.9 | 72.3 | 75.1 | 72.7 | 74.5 | 76.7 | 78.4 | ||||||||||||
| Narrow net external debt/CAR | (18.6) | (23.7) | (36.2) | (27.3) | (8.9) | (2.2) | (5.2) | (4.4) | (3.5) | (2.4) | ||||||||||||
| GG balance/GDP | (1.3) | (1.7) | (5.7) | (6.2) | (4.4) | (3.8) | (3.2) | (2.7) | (2.3) | (2.3) | ||||||||||||
| GG net debt/GDP | 28.0 | 28.9 | 38.1 | 42.7 | 45.2 | 44.7 | 43.9 | 42.8 | 41.3 | 39.9 | ||||||||||||
| CPI inflation | 5.2 | 2.4 | 2.4 | 3.9 | 5.8 | 6.0 | 3.4 | 3.1 | 3.0 | 3.0 | ||||||||||||
| Bank credit to resident private sector/GDP | 49.0 | 49.3 | 53.5 | 51.3 | 50.1 | 49.3 | 49.8 | 50.5 | 51.1 | 51.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
Singapore (AAA/Stable/A-1+)
- Analyst: andrew.wood@spglobal.com
- Latest publication: (Full Analysis) Singapore, June 11, 2024
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.
Table 19
| Singapore | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 66.8 | 66.1 | 61.5 | 79.6 | 88.4 | 84.7 | 88.1 | 93.3 | 98.8 | 103.3 | ||||||||||||
| GDP growth | 3.5 | 1.4 | (3.9) | 9.7 | 3.8 | 1.1 | 2.2 | 2.5 | 2.6 | 2.6 | ||||||||||||
| GDP per capita growth | 3.0 | 0.2 | (3.6) | 14.4 | 0.5 | (3.7) | 1.6 | 1.9 | 2.0 | 2.0 | ||||||||||||
| Current account balance/GDP | 16.0 | 16.0 | 16.6 | 19.8 | 18.0 | 19.8 | 17.3 | 16.4 | 15.6 | 15.0 | ||||||||||||
| Gross external financing needs/CAR&FXR | 154.9 | 157.6 | 164.3 | 147.0 | 140.5 | 158.4 | 155.4 | 153.8 | 151.2 | 149.6 | ||||||||||||
| Narrow net external debt/CAR | (68.0) | (73.2) | (88.6) | (84.5) | (74.0) | (95.6) | (105.6) | (111.2) | (106.9) | (107.3) | ||||||||||||
| GG balance/GDP | 4.5 | 7.1 | (13.8) | 0.6 | 0.7 | 2.0 | 2.0 | 2.5 | 2.5 | 2.5 | ||||||||||||
| GG net debt/GDP | (62.5) | (64.6) | (61.0) | (70.2) | (56.0) | (60.2) | (59.4) | (59.1) | (58.8) | (58.9) | ||||||||||||
| CPI inflation | 0.4 | 0.6 | (0.2) | 2.3 | 6.1 | 4.8 | 2.9 | 2.0 | 1.9 | 1.9 | ||||||||||||
| Bank credit to resident private sector/GDP | 117.8 | 119.2 | 129.1 | 139.9 | 118.4 | 117.9 | 118.1 | 118.1 | 116.5 | 115.6 | ||||||||||||
| 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: (Full Analysis) Sri Lanka, May 31, 2024
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 Sri Lankan government's debt profile achieved through its domestic restructuring exercises against the continued risk to the government's fiscal sustainability from ongoing economic, external, and fiscal pressures.
Downside scenario
We could lower the long-term local-currency rating on Sri Lanka if there are indications of further restructuring of obligations denominated in Sri Lankan rupee (LKR) 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 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 4.4 | 4.1 | 3.9 | 4.0 | 3.3 | 3.8 | 4.2 | 4.6 | 4.8 | 5.1 | ||||||||||||
| GDP growth | 2.3 | (0.2) | (4.6) | 4.2 | (7.4) | (2.3) | 2.0 | 2.6 | 2.6 | 2.6 | ||||||||||||
| GDP per capita growth | 1.2 | (0.8) | (5.1) | 3.1 | (7.5) | (1.7) | 1.3 | 1.9 | 1.9 | 1.9 | ||||||||||||
| Current account balance/GDP | (3.0) | (2.1) | (1.4) | (3.7) | (2.0) | 1.9 | 0.1 | (0.6) | (1.0) | (1.3) | ||||||||||||
| Gross external financing needs/CAR&FXR | 120.5 | 123.5 | 119.9 | 135.8 | 149.5 | 137.9 | 118.8 | 116.4 | 109.3 | 108.1 | ||||||||||||
| Narrow net external debt/CAR | 137.5 | 148.1 | 171.4 | 189.4 | 180.9 | 159.9 | 143.4 | 132.8 | 126.4 | 121.5 | ||||||||||||
| GG balance/GDP | (5.0) | (9.0) | (10.7) | (11.7) | (10.2) | (8.3) | (8.5) | (7.5) | (7.2) | (6.8) | ||||||||||||
| GG net debt/GDP | 77.6 | 81.2 | 95.8 | 100.7 | 115.7 | 103.1 | 103.7 | 104.5 | 104.6 | 104.2 | ||||||||||||
| CPI inflation | 0.4 | 6.2 | 4.6 | 14.0 | 59.2 | 4.2 | 6.0 | 5.5 | 5.5 | 5.5 | ||||||||||||
| Bank credit to resident private sector/GDP | 41.2 | 41.9 | 46.5 | 48.6 | 39.8 | 31.4 | 32.7 | 34.0 | 35.4 | 36.6 | ||||||||||||
| 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. | ||||||||||||||||||||||
Taiwan (AA+/Stable/A-1+)
- Analyst: yeefarn.phua@spglobal.com
Latest publication: (Full Analysis) Taiwan, April 30, 2024
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, 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 25.8 | 25.9 | 28.6 | 33.1 | 32.7 | 32.3 | 33.1 | 34.4 | 36.2 | 38.1 | ||||||||||||
| GDP growth | 2.8 | 3.1 | 3.4 | 6.6 | 2.6 | 1.3 | 4.0 | 2.1 | 2.4 | 2.4 | ||||||||||||
| GDP per capita growth | 2.7 | 3.0 | 3.6 | 7.5 | 3.1 | 0.6 | 3.9 | 2.0 | 2.4 | 2.4 | ||||||||||||
| Current account balance/GDP | 11.8 | 11.0 | 14.6 | 15.3 | 13.3 | 13.8 | 14.1 | 13.5 | 13.5 | 13.6 | ||||||||||||
| Gross external financing needs/CAR&FXR | 62.7 | 63.4 | 56.6 | 56.8 | 60.8 | 57.5 | 57.9 | 57.9 | 58.0 | 58.3 | ||||||||||||
| Narrow net external debt/CAR | (100.9) | (113.9) | (143.2) | (114.2) | (112.1) | (130.8) | (128.6) | (126.2) | (123.6) | (120.7) | ||||||||||||
| GG balance/GDP | 0.0 | 0.1 | (1.0) | (0.2) | 0.2 | (0.6) | (1.0) | (1.1) | (1.1) | (1.1) | ||||||||||||
| GG net debt/GDP | 33.5 | 31.9 | 31.4 | 29.2 | 27.6 | 27.6 | 26.9 | 27.0 | 27.0 | 26.9 | ||||||||||||
| CPI inflation | 1.4 | 0.6 | (0.2) | 2.0 | 3.0 | 2.5 | 2.1 | 1.5 | 0.8 | 0.8 | ||||||||||||
| Bank credit to resident private sector/GDP | 156.7 | 161.0 | 164.8 | 165.7 | 168.3 | 174.4 | 172.3 | 172.3 | 171.5 | 170.9 | ||||||||||||
| 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. | ||||||||||||||||||||||
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 record of enhanced political stability, and if we assess that incentives for abrupt political changes have diminished.
Table 22
| Thailand | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 7.3 | 7.8 | 7.2 | 7.2 | 7.1 | 7.3 | 7.4 | 7.8 | 8.2 | 8.7 | ||||||||||||
| GDP growth | 4.2 | 2.1 | (6.1) | 1.6 | 2.5 | 1.9 | 3.4 | 3.3 | 3.2 | 3.1 | ||||||||||||
| GDP per capita growth | 3.9 | 1.8 | (6.3) | 1.4 | 2.3 | 1.7 | 3.3 | 3.2 | 3.1 | 3.0 | ||||||||||||
| Current account balance/GDP | 5.6 | 7.0 | 4.2 | (2.0) | (3.2) | 1.4 | 1.9 | 2.4 | 2.4 | 2.7 | ||||||||||||
| Gross external financing needs/CAR&FXR | 68.7 | 66.4 | 62.8 | 70.3 | 73.4 | 75.2 | 74.2 | 74.3 | 74.8 | 75.1 | ||||||||||||
| Narrow net external debt/CAR | (25.6) | (28.6) | (40.6) | (29.4) | (21.1) | (23.6) | (22.6) | (21.2) | (20.1) | (19.4) | ||||||||||||
| GG balance/GDP | 1.2 | (0.9) | (3.4) | (5.4) | (3.1) | (0.6) | (2.9) | (3.4) | (3.2) | (3.0) | ||||||||||||
| GG net debt/GDP | 19.7 | 19.8 | 28.5 | 37.3 | 39.9 | 42.2 | 41.4 | 42.5 | 43.6 | 44.6 | ||||||||||||
| CPI inflation | 1.1 | 0.7 | (0.9) | 1.2 | 6.1 | 1.2 | 1.1 | 1.6 | 1.1 | 1.1 | ||||||||||||
| Bank credit to resident private sector/GDP | 114.2 | 113.5 | 128.0 | 129.6 | 124.7 | 123.6 | 121.8 | 121.1 | 120.7 | 121.1 | ||||||||||||
| 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. | ||||||||||||||||||||||
Vietnam (BB+/Stable/B)
- Analyst: andrew.wood@spglobal.com
- Latest publication: Vietnam Ratings Affirmed At 'BB+/B'; Outlook Stable, June 20, 2024
Rating score snapshot:
- Institutional assessment: 4
- Economic assessment: 4
- External assessment: 3
- Fiscal assessment – Flexibility and performance: 4
- Fiscal assessment – Debt burden: 3
- Monetary assessment: 4
Outlook: Stable
The stable outlook reflects our expectation that Vietnam's economy will accelerate over the next 12 months as 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 Vietnam's banking system emerges such that the government's fiscal position weakens. Increase in net general government debt by more than 5% of GDP per year, in addition to either interest payments on government debt exceeding 10% of revenues, or the government's net debt stock surpassing 30% of GDP, on a sustained basis, would indicate downward pressure on the ratings.
Upside scenario
We may raise our ratings if Vietnam's institutional settings improve considerably and augment policy predictability and transparency, including in external data provision and reliability. Such changes in the policy environment could further bolster investor confidence in the country's economic and financial stability.
We could also raise the ratings if Vietnam becomes a net external creditor, which could potentially be driven by higher current account surpluses than we expect and a concomitant rise in external assets.
Sustained accumulation of net general government debt of less than 3% of GDP per year, combined with a fall in the government's interest burden to below 5% of revenues, could also put upward pressure on the ratings.
Table 23
| Vietnam | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024e | 2025e | 2026e | 2027e | |||||||||||||
| GDP per capita (in ‘000) | 3.3 | 3.5 | 3.6 | 3.7 | 4.1 | 4.3 | 4.5 | 4.7 | 5.1 | 5.4 | ||||||||||||
| GDP growth | 7.5 | 7.4 | 2.9 | 2.6 | 8.1 | 5.1 | 5.8 | 6.7 | 6.7 | 6.7 | ||||||||||||
| GDP per capita growth | 6.3 | 5.3 | 1.7 | 1.6 | 7.0 | 4.2 | 4.7 | 5.7 | 5.7 | 5.6 | ||||||||||||
| Current account balance/GDP | 1.9 | 3.9 | 4.3 | (1.3) | 0.3 | 5.8 | 5.4 | 3.4 | 2.0 | 1.5 | ||||||||||||
| Gross external financing needs/CAR&FXR | 93.0 | 90.3 | 85.8 | 89.0 | 88.0 | 87.4 | 87.8 | 87.5 | 88.2 | 88.5 | ||||||||||||
| Narrow net external debt/CAR | 28.9 | 23.1 | 17.9 | 18.4 | 21.9 | 19.8 | 15.3 | 13.5 | 12.4 | 12.4 | ||||||||||||
| GG balance/GDP | (1.0) | (0.4) | (2.9) | (3.4) | (3.6) | (3.5) | (3.5) | (3.6) | (3.7) | (3.8) | ||||||||||||
| GG net debt/GDP | 33.6 | 30.6 | 32.2 | 31.8 | 25.2 | 26.1 | 26.9 | 27.6 | 28.5 | 29.7 | ||||||||||||
| CPI inflation | 3.5 | 2.8 | 3.2 | 1.8 | 3.2 | 3.3 | 3.5 | 3.5 | 3.4 | 3.3 | ||||||||||||
| Bank credit to resident private sector/GDP | 105.3 | 108.0 | 115.5 | 124.3 | 125.9 | 134.1 | 139.9 | 144.7 | 149.7 | 155.1 | ||||||||||||
| 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. | ||||||||||||||||||||||
Editor: Jasper Moiseiwitsch
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| 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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