Singapore

Country risk

Country risk in Singapore is low, suggesting a relatively low likelihood that it will be unable or unwilling to meet its external debt obligations. Singapore has the highest possible sovereign credit ratings from Moody’s, Fitch and S&P. Singapore's large fiscal and external buffers that are in line with, and often surpass, those of other highly rated countries supports the rating agencies’ assessments. In addition, very strong institutions and governance alongside effective policy implementation ensures ongoing fiscal strength and broad financial stability. These strengths help mitigate near-term cyclical pressures and provide some cushion to address structural challenges.

Singapore is ranked 2nd out of a possible 190 economies on the World Banks ease of doing business scorecard, only behind New Zealand. Singapore excels in all areas of doing business, particularly enforcing contracts, protecting minority investors, starting a business, dealing with construction permits and paying taxes. The Singaporean government places a strong emphasis on implementing policies to enhance the business environment and facilitate investment.

Singapore ranks near the top in most areas of governance, but less so on voice and accountability.

Expropriation risk is low. Singapore has an efficient, business-friendly regulatory environment for investment.

Political risk is low. Singapore has one of the most stable political systems in the world; the People’s Action Party (PAP) has been the main governing party since 1959. Amid the COVID-induced economic slump, the PAP’s share of the popular vote slid to 61%, its second-worst result on record. This has limited implications for political risk. Abrupt policy changes are unlikely, considering the ruling PAP’s ongoing strong mandate to govern. The establishment of an official "Leader of the Opposition", a newly instituted role in Singapore, is likely to strengthen checks and balances and lead to a more consultative form of governance that potentially improves accountability.