Not all Debts are Dilemmas

Singapore's debt portfolio is a lesson in prudent decision-making, where a long-term view of its economy governs the process.

- Jennifer Paldano Goonewardane

By December 2023, Singapore had one of the highest government gross debt in the world,amounting to 170.8 percent of its Nominal GDP. The figure surpasses the world’s largest economy, the United States, which recorded a gross debt to GDP ratio of 124 percent in December 2023. Alarming? Of course, especially when debt is a buzzword in today’s global economic landscape, when the world is living in a present reality of enormous debt-laden economies from the global north to the south, with some of the weaker economies crumbling under utterly abysmal economic mismanagement amid outrageous borrowings to fund unfeasible projects.

Crushing debt strangles economic growth and opportunities for citizens while stymying investment. As for Singapore, the city-state has long been the poster child of economic gallantry in Asia and a role model for the entire world. Hence, it ’s essential to understand the dynamics of Singapore’s gargantuan domestic debt and its impact on economic growth. From weathering the 2008 global financial crisis to facing the COVID-19 slowdown, Singapore has responded dignifiedly to all those fallouts. Hence, its national debt status cannot be a callous move by its leaders. As a regional and global economic powerhouse, Singapore epitomizes success, and a change in its fortunes would be inconceivable. From the outside, Singapore has the right mix of many things to propel its future: an advanced economy run by a probusiness government, a robust monetary and fiscal policy that has consolidated a solid currency buttressed by good governance, and an economy driven by exports in electronics manufacturing and machinery, financial services, tourism, and the world’s busiest cargo seaport.