Economy estimated expanding 2.7% this year, after growing 1.1% in 2023, according to rating agency.

Fitch Ratings said Friday it affirmed Singapore’s long-term foreign-currency issuer default rating at AAA with a stable outlook.

The country’s rating reflects “its exceptionally strong fiscal and external balance sheets, which are supported by large external and fiscal surpluses, high income per capita, a prudent macroeconomic policy framework and a favorable business environment,” it said in a statement.

“These strengths mitigate the economy’s vulnerability to external shocks arising from its high degree of openness,” it added.

Fitch said it expects general government surpluses averaging 9.2% of GDP over the fiscal year ending March 31, 2025 and the following fiscal year.

Singapore’s economy, however, faces long-term challenges from an ageing population, although the government’s healthcare spending has been rising and reforms aim to strengthen social safety nets and pension systems, said the agency.

While the economy posted a slow growth of 1.1% last year, it is estimated expanding 2.7% this year and 3% in 2025, according to Fitch.

The agency noted that Singapore’s rating could face a downgrade if there is a substantial deterioration in its external balance sheet, or a severe banking crisis that would spill over into the economy.