S&P Retains Taiwan's Sovereign Ratings

(RTTNews) - S&P Global Ratings retained credit ratings of Taiwan with 'stable' outlook on Monday as strong external position and robust economic support help the nation to withstand headwinds.

The long-term rating was affirmed at 'AA+' and the short-term issuer credit ratings at 'A-1+'.

The stable outlook on the long-term rating reflects the assumption that cross-strait relations and fluid trade dynamics are unlikely to seriously disrupt Taiwan's economic stability over the next two years.

The rating agency forecast Taiwan's competitive export sector to benefit from global advancement in the IT sector despite current uncertainties related to global trade.

Taiwan's fiscal settings remain healthy underpinned by robust revenue growth. Moreover, sufficient domestic liquidity as well as low debt servicing contributes to the fiscal strength, S&P noted. Further, the economy is forecast to grow at a slower pace of 2.1 percent this year following an estimated 4.6 percent expansion in 2024.

For 2025, the government has budgeted a deficit of 0.7 percent of GDP in the face of higher defense and social welfare spending. An aging population will increase pressure on social and welfare spending over time.