Standard & Poor's Ratings Services yesterday denied a local newspaper report that it may downgrade the sovereign rating of Taiwan by the end of the year in the wake of recent political turmoil.
The international ratings agency said it maintained its current view on Taiwan's ratings -- AA- and A-1+ foreign and local currency sovereign credit ratings with a negative outlook -- as was published on Sept. 5 in a report titled "Asia-Pacific Sovereign Report Card."
Quoting S&P credit analyst Ping Chew (
"This statement is false, and was not made by Standard & Poor's," S&P said yesterday.
The ratings service added that Taiwan's credit ratings are supported by the nation's entrepreneurial economy, high savings rate and its strong external balance sheet.
However, "Persistent high budget deficits and a lack of political will to implement necessary fiscal reforms are weakening this support," S&P said. "Continuing failure to address the deteriorating fiscal situation could lead to a downgrade of Taiwan's credit ratings."
Still, S&P said in June that political confrontations had stalled the government's economic and fiscal reform efforts, a situation that could result in a downgrading of Taiwan's rating.
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