Fitch affirms Singapore's top sovereign ratings

FITCH Ratings has affirmed Singapore's AAA sovereign ratings, citing its strong economic fundamentals and stable political scene.

The ratings are seen as indicators of the risk level of a nation's investing environment and the government's chance of default.

Fitch said its ratings were supported by Singapore's strong sovereign balance sheet, which insulates its economy from external shocks.

The country has a track record of fiscal prudence, underpinned by the Government's commitment to balance its Budget, said the ratings agency. It also noted Singapore's strong economic performance, the result of low taxes and sound public institutions. There was praise as well for regulatory prudence, well-capitalised banks and healthy household balance sheets.

However, Fitch said that as a small and open economy, Singapore's economic growth is more volatile than the AAA range median, and more exposed to global cycles.

It noted that rising public concerns over the influx of foreign labour, inflation and growing income inequality have prompted the Government to fine-tune its economic model.

Fitch said its assessment reflects Singapore's continued focus on attracting investment and maintaining a high level of political stability.