Singapore's credit profile reflects the city state's very high per-capita income, a diverse and competitive economy, strong fiscal metrics, and robust institutions, Moody's Investors Service said on Thursday.
Following an economic expansion of 2.7 percent in the first half of 2017, Moody's projects real GDP growth for the full year at 2.5 percent, the midpoint of the government's forecast of 2.0 percent-3.0 percent.
The ratings agency flags city state's muted domestic demand countering growth in external demand.
Moody's has Aaa stable rating for Singapore.
"In response, the government has implemented targeted assistance to households and other sectors, while adhering to its prudent fiscal framework that prohibits financing deficits through debt," it said in a statement.
Ongoing economic restructuring--which intends to shift Singapore away from a historic reliance on the inflow of foreign labor, while concurrently increasing labor productivity--also contributes to lower, albeit less volatile, growth, Moody's said.
But Singapore's strong external buffers, relatively sound banking system and stable political environment means city state's susceptibility to event risk is "Very Low".
The stable outlook is premised on the authorities' ability to adapt policies to limit the country's vulnerability to external demand and financial shocks, and to avoid sustained damage to fiscal fundamentals, it said.