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Rating Affirmed at ‘AAA’: Singapore’s ‘AAA’ rating reflects its exceptionally strong fiscal and external balance sheets, sound macroeconomic policy framework, high per capita income and favourable business environment. This is balanced against its vulnerability to external shocks, given the economy’s high degree of trade openness and international linkages of the financial sector.Growth Rebounding: Singapore’s economy is recovering fast from the Covid-19 pandemic, with GDP growing by 7.6% yoy in 1H21, led by strong growth in exports and manufacturing. We expect the economy to grow by 5.6% for the full year in 2021. Sound Public Finances: Public finances remain strong, supported by certain fiscal rules for government debt and deficits. Government debt is issued mainly to develop the local bond market, provide saving options for individuals and to meet the investment needs of the Central Provident Fund (CPF). Budget deficits therefore do not lead to a rise in government debt.. Large Fiscal Reserves: Singapore has implemented large fiscal relief measures to cushion the economy from the Covid shock, which in turn led to a large central government deficit of 13.9% of GDP in 2020. Strong Net External Creditor: Large external assets, accumulated in part through persistent current account surpluses, remain a key credit strength. This is reflected in a net external creditor position of about 330% of GDP in 2021 compared with the net debtor position of the ‘AAA’ median of -23%. We expect the current account surplus to be about 17% of GDP in 2021, although this could decline gradually as the savings rate falls due to population ageing. Strong Structural Metrics: ���������ֳ� estimates Singapore’s GDP per capita for 2021 at USD63,960, which is high and only marginally below the ‘AAA’ median of USD65,769. Medium-Term Challenges: Singapore faces the challenges of an ageing population and structural changes in the drivers of growth and employment. The government has established a task force to identify new growth drivers and some existing initiatives, for instance to boost digitalisation.