Worldbox Business Intelligence Risk Rating - Singapore

Overall Risk Score 26 (Stable)


Political risk: Stable 9/10


Economic risk: Stable 8/10


Commercial risk: Stable 9/10


The risk assessment of a country is made up of 3 components, being Political, Economic and Commercial. Each component is scored out of 10 with 1 being the highest risk and 10 the lowest.

ESG Risk: 8/10 (Stable)*


*Environmental, social and governance (ESG) issues are becoming increasingly important to companies, investors and consumers in Southeast Asia. That is why we are now preparing a separate  ESG score and section with our quarterly country risk reports. We explain how each country rates, looking at the E, S and G individually, and outline recent developments.

Political Risk – Stable at 9


Singapore is one of Southeast Asia’s most stable and prosperous countries. The electoral and legal framework allows for some political pluralism, but constrains the activities of opposition parties and limits freedoms of expression, assembly, and association. The media environment is controlled and self-censorship among journalists is common. There are also curbs on online content. The People’s Action Party (PAP) has ruled the country since it split from Malaysia in 1965.


In November 2023, Prime Minister Lee Hsien Loong, the eldest son of the country’s founding father Lee Kuan Yew, announced he would hand over the leadership of PAP to Deputy Prime Minister Lawrence Wong as soon as the PAP’s 70th anniversary in November 2024. Wong’s leadership of the PAP would almost certainly ensure he becomes the fourth leader of Singapore. Lee Hsien has been prime minister since 2004.  

Wong, a former minister for finance and national development, won plaudits for overseeing Singapore’s COVID response, which achieved one of the world’s lowest rates of illness and death during the early days of the pandemic. Wong would be Singapore’s second leader not to come from the Lee family after Goh Chok Tong, who governed between 1990 and 2004. Worldbox Business Intelligence does not expect any significant shifts in policy after Wong becomes prime minister.


Economic Risk – Stable at 8


A major financial hub in the Asia Pacific region, Singapore is home to one of the world’s most advanced economies, despite a small domestic market and a lack of natural resources. It is also one of the most stable economies, with no foreign debt, and robust domestic and external finances. Singapore has the highest possible sovereign credit ratings from Moody’s, Fitch and S&P.


Freedom House rates it as one of the most open economies in the world. Robust institutions and excellent governance alongside effective policy implementation supports fiscal strength and broad financial stability, and provides plenty of scope to counter cyclical downturns and any long-term structural challenges.


Key industrial sectors include electronics, chemicals, biomedical sciences, logistics and transport engineering. Medical technology, aerospace engineering, clean energy, healthcare, and content development are all emerging sectors. Exports of electronics and machinery, financial services, tourism, and the world’s busiest cargo seaport help to drive the economy.


Commercial Risk – Stable at 9


Singapore consistently ranks as one of the best economies in the world in which to operate. It ranks second out of a possible 190 economies on the World Bank’s ease of doing business scorecard, for example, only behind New Zealand. The republic excels in all areas of doing business, particularly enforcing contracts, protecting minority investors, starting a business, dealing with construction permits and paying taxes. The Singaporean government places a strong emphasis on implementing policies to enhance the business environment and encourage investment.


The country ranks in first place in terms of economic freedom, according to the Heritage Foundation. Although certain civil liberties remain restricted, the PAP has championed economic liberalization and international trade.


It is also one of the least corrupt societies in the world, ranking fifth in Transparency International’s (TI) 2022 Corruption Perceptions Index. Singapore is again the only Asian country ranked in the top 10. Singapore has tackled corruption decisively and garnered international recognition for its incorruptibility and clean public sector, according to TI. 


Singapore benefits from excellent infrastructure, reflecting high levels of investment supported by years of political stability and economic prosperity. The country hosts superb transport links, for example, and its nationwide fibre network provides its citizens with among the fastest home internet speeds in the world.


January Bulletin


Political Risk – Stable at 9


Unprecedented scandals rocked the political establishment in July. The arrest of Transport Minister S Iswaran, marked the first arrest of a minister in four decades. The arrests followed allegations that two other senior ministers had rented colonial-era bungalows in a high-end neighbourhood at below-market rates. Both were cleared of any wrongdoing.


However, the episode sparked a heated debate on inequality in Singapore and comes at a time when many people particularly in the younger age brackets feel left behind by Singapore’s economic miracle. Surging rents, with rises of as much as 70%, in particular are becoming a key political issue. Young singles are largely shut out of the subsidised housing programme and are starting to question the government’s resolve to tackle the problem, according to a recent article in the Business Times.


The newspaper added that solving the housing problem is crucial for PAP as the party navigates succession. Prime Minister Lee Hsien Loong is preparing to hand power to the next generation of party leaders. Lee has said that policies must reflect the younger generation’s “significantly different life aspirations and priorities”.


These concerns explain the government’s decision in April to double the additional buyer’s stamp duty to 60% for foreigners buying homes in Singapore– the highest levy among major global cities – while taking other steps such as releasing more land for construction to boost new supply. One analyst has even suggested that the decision to hike stamp duty by so much could signify that PAP is preparing for an election earlier than in 2025.


Deputy Prime Minister Lawrence Wong, all but guaranteed to become the country’s fourth prime minister, has also acknowledged that many Singaporeans feel “anxiety” about being forced to compete with foreigners for jobs. He has vowed to put Singaporeans “at the centre of everything we do”. Balancing the resentment felt by many Singaporeans at the influx of foreign workers and the needs of the economy for highly-skilled workers is likely to prove one of his most challenging tasks.


The proportion of overseas workers on temporary visas has risen dramatically over the past half-century, from 3.2% in 1970 to 33% in 2020. Most are low-paid manual or domestic workers. But much of the resentment is directed at highly paid professionals, many of whom work in the key finance sector. Wong has already vowed to introduce a more progressive tax system, and plans to raise taxes on the richest earners.


The other main challenges include balancing Singapore’s close relations with both China and the US, a difficult task given both powers are battling for influence in the region and given the escalating tensions over Taiwan.


Economic Risk – Stable at 8


A quarterly survey of economists compiled by the Japan Center for Economic Research and Nikkei in December found that Singapore’s growth is expected to triple to 2.8% in 2024, thanks to recovering exports of semiconductors and other electronics.


The government expects GDP growth of between 1% and 3% next year. Growth in the third quarter of 2023 has been revised upwards from a preliminary figure of 0.7% year-on-year to a 1.1% expansion. Overall growth in 2023 is forecast at 1%.


The growth prospects of the manufacturing and trade-related sectors in Singapore are expected to improve in tandem with the turnaround in global electronics demand in 2024, according to Singapore's Ministry of Trade and Industry. It presumably expects most of the growth to be focused on the second half of the year given most analysts anticipate a slowdown in global economic activity and possibly even a recession in the first half of 2024.


A quarterly survey by the Monetary Authority of Singapore (MAS) of 25 economists and analysts, published in December found that headline and core inflation — which strips out prices of private transport and accommodation — is expected to drop to 3.4% and 3% respectively, in 2024. Inflation in 2023 is forecast to come in at 4.8%, slightly higher than the 4.7% estimated in the previous survey, while the outlook for MAS core inflation remained unchanged at 4.1%.


Falling inflation and subdued economic growth suggest the Monetary Authority of Singapore (MAS) is likely to loosen its monetary policy early next year. Singapore manages monetary policy through exchange rate settings and not interest rates.


Commercial Risk – Stable at 9


Malaysia and Singapore have agreed in January to develop a special economic zone (SEZ) in the southern Malaysian state of Johor, with the aim of attracting investment and increasing the movement of goods and people across their shared border. The Johor–Singapore Special Economic Zone (JS-SEZ) will allow Malaysia to tap Singapore’s vast bank of investment capital and cutting-edge technology, while also opening up Malaysia’s abundant supply of land and human resources to Singaporean businesses.(1)


1.New special economic zone in Malaysia

Environmental, Social and Governance (ESG) - Stable at 8


The United Nations’ Sustainable Development Goals (SDGs) are recognized as a beneficial framework for responsible investment. The Sustainable Development Report from Cambridge University Press assesses the progress of all 193 UN Member States on the SDGs. It provides a useful means of ranking Southeast Asian countries on their ESG progress.


Singapore is ranked 64 out of 166 in the 2022 report with a score of 71.8.

Singapore has the highest score in the ASEAN region, a reflection of the country’s advanced economy, the rule of law and the increasing attention paid to ESG issues by the authorities.


Environment - Singapore is a liveable and sustainable city, with clean air and a generally healthy environment, a robust and diversified supply of water, green spaces and a highly efficient public transport network. It is ranked as the fourth most sustainable city in Asia, according to the 2022 Sustainable Cities Index.


The government has taken early and ambitious action on climate change. In 2021, about 95% of its electricity was generated from natural gas - the cleanest form of fossil fuel - compared to 18% in 2000. It was also the first country to impose a vehicle quota system to cap vehicle growth, and is the only country to set a zero-growth rate for cars and motorcycles. The government’s Singapore Green Plan 2030 has set out strategies and initiatives to achieve economic growth and a good living environment.


Social – Singapore would be rated higher but for concerns around social issues such as workers’ rights, and political freedom in areas such as expression, assembly, and association. Independent news sites face challenges when operating in the country. However, the government provides excellent social housing at relatively low cost and in 2022, 77% of the resident population lived in public housing provided by the Housing and Development Board. In addition, most people work 40 to 50 hours a week and enjoy very high living standards and good pension provision. Singapore, with its very low crime rate, is also one of the safest countries in the world to live. Educational standards are also very high.


Governance – Another area where Singapore scores highly. The country’s success as a global commercial and financial hub is based on its willingness to embrace international standards, especially in corporate law and capital markets regulation. The authorities have updated their corporate governance code several times over the past 20 years and are moving from a voluntary ‘comply-or-explain’ approach to a partially mandatory one.


January Bulletin


Environmental, Social and Governance (ESG) - Stable at 8


Around 79% of Singaporean respondents to a survey by enterprise software business UiPath said they struggled with ESG data collection. The results of the survey, published in November 2023, also found that 58% of senior decision-makers across Singapore businesses view data inaccuracy or poor data quality as a significant obstacle in ESG data collection, and 53% are considering investing in automation to support ESG data management.


Latest economic data

f – forecasts

1 Three-month S$ SIBOR rate

* Forecasts by Worldbox Intelligence

** Trading Economics

*** These figures provide a misleading picture of Singapore’s creditworthiness. They only show gross national debt. When Singapore’s assets are taken into account, the country has a net debt-to-GDP ratio of 0%.

Source: Singapore Government, Monetary Authority of Singapore, except where stated


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