S&P Global Ratings yesterday reaffirmed Taiwan’s sovereign credit ratings, maintaining its “AA+” long-term and “A-1+” short-term ratings with a stable outlook.
Taiwan’s “robust net external asset position, sound fiscal framework and strong monetary flexibility” continue to support its creditworthiness despite mounting economic headwinds from a weakening global trade environment, S&P said in a statement.
While geopolitical tensions remain a source of pressure on the nation’s ratings, they would not hinder the long-term development of its manufacturing industry, the agency said.
Photo: Cheng I-hwa, AFP
In addition, Taiwan’s advantages, such as its leading position in advanced chip manufacturing, sound fiscal position and strong net external assets, provide it with sufficient buffers to mitigate the impact of US tariffs on the economy, it said.
The agency’s latest assessment comes amid renewed concerns over global trade tensions, as US President Donald Trump’s tariff policy raises the risk of a broader trade war among major economies and casts a cloud on the prospects of global economic growth.
Economists said that Taiwan’s solid current account surplus and ample foreign exchange reserves, as well as its technology prowess and the central bank’s monetary flexibility, have prevented the nation from the negative impacts of capital outflows and external shocks.
S&P praised the central bank’s sound monetary management in ensuring ample liquidity in the domestic financial system and maintaining inflation at one of the lowest levels in Asia.
The agency also highlighted the relatively flexible exchange rate of the New Taiwan dollar and the smooth functioning of foreign exchange markets under the central bank’s stewardship, both of which help cushion economic and financial disturbances, the agency said.
As of the end of last month, Taiwan’s foreign exchange reserves stood at US$578.02 billion, up US$438 million from the previous month, while its current account surplus reached US$34.40 billion in the fourth quarter of last year, the central bank’s latest statistics showed.
S&P has maintained its “AA+” long-term and “A-1+” short-term sovereign credit ratings for Taiwan since 2022.
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