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Is the Government borrowing too much? Isn't Singapores debt-to-GDP ratio already very high?



The gross debt-to-GDP ratio is not an accurate representation of the Singapore Governments financial position. It does not consider our strong reserves position.   In fact, Singapore has zero net debt. We have more assets than liabilities, and the excess of the assets over the liabilities are our reserves, which yield investment returns. The strength of our balance sheet is validated by our triple-A credit rating from international credit rating agencies.  More importantly, the majority of Government borrowing is for non-spending purposes.  Only borrowings under the Significant Investment Government Loan Act (SINGA), which make up a very small proportion of total Government borrowings, are for spending. Under the SINGA, the Government borrows to finance and capitalise nationally significant infrastructure, and there are strict safeguards under the SINGA to ensure prudence in borrowing.  A more meaningful measure of our debt sustainability would be to look at the debt-to-GDP ratio of SINGA debt, which is significantly lower.  For more information on Government borrowings, click https://www.mof.gov.sg/docs/default-source/default-document-library/news-and-publications/featured-reports/overview-of-singapore-government-borrowings-(jan-2022).pdf (here) .

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