Singapore's 2015 Budget highlights the government's institutional and governance strength: S&P

[SINGAPORE ] Standard & Poor's Ratings Services said today that Singapore's 2015 budget continues to show the strength of the government's institutional and governance effectiveness. This factor is a key support for their sovereign credit rating on Singapore (unsolicited ratings AAA/Stable/A-1+; axAAA/axA-1+).

"The Singapore budget focuses on longer-term fiscal challenges even as it addresses the immediate capacity constraints in transport and health services, areas that will see significant increases in spending," said Standard & Poor's credit analyst Yee Farn Phua.

Policies announced in the Singapore dollar S$68.2 billion budget aim to boost the country's economic growth potential, retrain Singaporean workers, and ensure increased funding to meet the needs of Singapore's aging population. Investments in these areas significantly outsize the S$705 million transfers to households. These measures should help maintain Singapore's credit strengths even as the population ages at one of the fastest rates in Asia.

After accounting for revenue not reported as part of the Singapore budget, S&P estimates that the general government account will remain in surplus over the fiscal years ending March 2015 and March 2016. The government projects a budget deficit of S$6.7 billion (1.7 per cent of GDP) in the fiscal year ending March 2016 after a nearly balanced budget in the current fiscal year.

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INFOGRAPHIC: Key budget numbers