Taiwan’s long-term issuer credit rating was raised to AA from AA-, while its outlook was upgraded from stable to positive by S&P Global Ratings April 22.
 
According to a report issued by the New York-headquartered credit rating agency, the change reflects Taiwan’s strong economic resilience and governance strength.
 
Taiwan’s export-oriented economy has benefited from high global demand for consumer electronics as well as information and communication technology products, the report said.
 
The government’s successful management of COVID-19 and fiscal response to the pandemic have also facilitated economic growth, S&P said. Taiwan’s strong monetary flexibility enhances its ability to weather major external shocks while keeping inflation stable and among the lowest in Asia, it added.
 
In a statement, the Ministry of Finance welcomed S&P’s assessment, adding that it is the first time the agency has upgraded the country’s credit rating outlook since 2010.
 
The MOF said it will continue to implement relief and revitalization measures to ensure Taiwan’s long-term economic stability and resiliency while exercising prudent management of national finances and launching incremental tax reforms.
 
Although S&P is bullish on Taiwan’s prospects, the agency also warned of its vulnerability to geopolitical risks, namely tensions with China.
 
The agency forecasts Taiwan’s economy will grow by 4.2% in 2021, with per capita gross domestic product increasing to US$30,900 and trend growth, as measured by the 10-year weighted average of real GDP per capita growth, to approximately 2.9%. (DL-E)
 
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