S&P holds Taiwan at 'AA-/A-1+', sanguine on cross-strait relations

TAIPEI -- In confirming its 'AA-/A-1+' issuer credit ratings on Taiwan, Standard and Poor’s says it is balancing a robust net external asset position, strong monetary flexibility, and dynamic private sector companies against a moderate level of Government debt.

“The stable outlook reflects our expectations that cross-strait relations will remain conducive for a continued recovery in Taiwan's economic performance,” S&P says.

“In this scenario, we expect modest general Government fiscal deficits over the following three to four years. This expected fiscal performance should keep the level of net general Government debt well below 60% of GDP.”

S&P expects the Taiwan economy to continue its gradual recovery from the slowdown in 2015.

“Although cross-strait relations have cooled since the current Government took office, the negative impact on economic activities has been modest,” it says. “We expect real GDP growth in the next four years to range from 2.0%-2.5% annually, partly on account of growing exports by Taiwan's dynamic and highly competitive information technology firms.”

For 2017, S&P estimates Taiwanese per capita GDP at US$23,600. www.standardandpoors.com (ATI).