Wed, May 02, 2018 - Page 12 News List

‘AA-’ long-term sovereign rating holds, S&P says

By Crystal Hsu  /  Staff reporter

Standard & Poor’s (S&P) Global Ratings has affirmed Taiwan’s long-term sovereign rating at “AA-” with a stable outlook, the central bank said in a statement on Monday.

The nation’s sound external asset position, flexible monetary policies, a vibrant private sector and a moderate level of government debt led the US-based ratings agency to keep the credit profile unchanged from last year, the bank said.

The nation’s financial system has sufficient liquidity, its monetary policy demonstrates strong flexibility and its monetary management is sound, the bank cited the report as saying.

These factors enable Taiwan to enjoy low and stable inflation, with a mild inflation outlook in the medium term, the statement said.

A relatively flexible currency helps moderate the potential impact of economic and financial blows, while low inflation and ample liquidity help ease interest burdens on the part of the government, it said.

Taiwan’s economic growth might continue to benefit from global trade improvement and a stable economy would lend support to the government’s financial standing in the next three to four years, it said.

S&P expects Taiwan’s economy to grow by an average of 2.6 percent in the next four years, driven by firms in the information and communication technology industry, it said.

S&P’s GDP projection is higher than the 2.42 percent increase the Directorate-General of Budget, Accounting and Statistics predicted in February.

It is due to update its forecast this month.

Taiwan’s economy expanded faster than expected in the first quarter.

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