IS DEBT/GDP RATIO A RELIABLE INDICATOR OF A COUNTRY’S ECONOMIC HEALTH
Part 2: Why is Singapore able to sustain a Debt/GDP Ratio of 177%% without economic collapse or significant devaluation of the Singapore Dollar? Table 1: Table 2: Singapore's Balance Sheet In Singapore’s case, what looks like a towering gross-debt ratio of 177% is really the liability leg of a much larger sovereign wealth portfolio . Because the assets are liquid, diversified and earn returns, and because constitutional rules forbid using borrowed money for current spending, markets treat Singapore’s “debt” more like sovereign investment units than true financing of deficits. Add a structural current-account surplus and large FX reserves, and there is little reason for bond or currency panic. 1 Borrowing is only for investment, not spending Under the Government Securities Act (GSA) and the Constitution, most bonds are issued to meet CPF demand or build a risk-free curve; proceeds are transferred to MAS and GIC for investment . mof.gov.sg mof.gov.sg ...