Singapore Flag National Debt

Singapore Might Have Large Gross Debt But Their Credit Rating Is AAA. Find Out Why

S$ 820,400,308,572

In Singapore's case, it borrows to invest, not to spend. Singapore remains a net creditor.

Source: Singapore Government Data. NOTE this Government gross debt is now reported on a BPM6 format. This results in higher external debt and higher external assests

Last Updated: May 30, 2024

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Interest Payments Per Year
Interest Payments Per Second
National Debt Per Citizen
Debt as % of GDP
GDP Of Singapore
Singapore Population

In this guide to Singapore’s National Debt, we discuss the amount of the debt, who manages it, how it raises money, the country’s credit rating, and we discuss its debt markets.

The National Debt Of Singapore

As of 2020, the IMF measured Singapore’s national debt-to-GDP ratio as 131.19%, the 6th highest in the world when expressed as a percentage of GDP.

However, no one seems to be worried about the country’s national debt. That’s because the headline figure reported by the IMF was gross national debt.

When economists examined Singapore’s net national debt, they discovered that the country owes nothing at all.

Gross vs Net National Debt

The difference between gross national debt and net national debt is that the gross debt only takes into account what the country has borrowed.

Net debt deducts the cash, shares, debentures, and bonds that the country holds and deducts those values from the gross debt figure.

Since the Singaporean government’s assets outweigh its debts, the country has a net debt-to-GDP ratio of 0%.

Why Does Singapore Borrow Money?

The answer is that the Singapore government does not borrow to fund running the country. Instead, it borrows for specific infrastructure projects. Once those projects are completed, they result in assets that have value.

Thus, the debts that the Singaporean government carries are matched by assets of equal or greater value.

Government Spending Restrictions

Both Singapore’s constitution and the Government Securities Act prevent the government from spending any funds raised through debt securities.

The money cannot be used to subsidize the annual budget. Instead it must be invested in capital projects that have sufficient profit projects to service the debt that funded them.

Aerial panorama of Singapore's Downtown Core
Aerial panorama of Singapore’s Downtown Core by Bob T via Wikimedia (CC BY-SA 4.0)

Who Manages Singapore’s Debt?

The public debt of Singapore is the responsibility of the government’s Ministry of Finance via the Monetary Authority of Singapore (MAS).

MAS is in effect the country’s central bank. It also manages the sale of Singapore Government Securities (SGS).

How Does Singapore Raise Money?

The four methods used by the Monetary Authority of Singapore to raise funds for the government are:

  1. Singapore Savings Bonds
  2. Singapore Government Securities (SGS)
  3. Special Singapore Government Securities (SSGS)
  4. Treasury bills

Singapore Savings Bonds

Singapore’s savings bonds are a retail enterprise offered to the general public. Instead of being classified as a typical government debt instrument, the savings bonds are actually certificates of deposit. These bonds allow members of the public to earn interest on their money over a fixed deposit term.

  • All bonds are issued for a fixed term of 10 years, but they can be cashed in once a month.
  • The bonds pay interest every six months and have a floating interest rate.

The bonds can be traded, but the fact that they can be cashed in at full face value during their lifetime means that buyers will never run the risk of value loss before their maturity date.

Singapore Government Securities (SGS)

The government of Singapore issues benchmark bonds to encourage the debt market in the county. These bonds are tradable act as a floor for the market and give investors a yardstick against which to judge the value of corporate bonds floated on the debt market.

Benchmark bonds are issued with maturities of 2, 5, 10, 15, 20, and 30-year maturities.

Special Singapore Government Securities (SSGS)

SSGSs are not tradeable. They are only issued to raise income for the Central Provident Fund (CPF). These government-backed securities provide Singapore’s state pension fund with a steady income from interest payments.

Treasury Bills

Treasury bills are short-term debt instruments that help the national government bridge the gap between taxes and tariffs and the rate of remittance.

These debt instruments enable Singapore’s government to maintain a steady cash flow even though its normal income arrives at an irregular rate.

Treasury bills are only offered with a one-year maturity. These are discounted and repaid at the full face amount. However, Treasury bills do not pay interest.

Secondary Debt Markets

One of the key reasons that Singapore decided to raise debt was to encourage the creation of a debt market in the country. This market enabled Singapore to develop as an international finance hub and enhance the country’s attraction to international banks.

Of the debt instruments that the government issues only SGSs and Treasury bills can be traded on the secondary market.

How Singapore’s Secondary Debt Market Works

MAS offers sales of both of these instruments at regular periods. The sale is effected by tender and only registered primary dealers are allowed to bid.

Members of the public are not allowed to buy bonds directly from the government except in the case of the Singapore Savings Bond.

Once the primary dealers have bought up the government’s bond issues, they resell them on the secondary market, which makes them available for other institutions and the general public.

Merlion Park, Singapore
Merlion Park, Singapore by Peugeoto via Wikimedia (CC BY-SA 3.0)

What Is Singapore’s Credit Rating?

Thanks to its net debt being zero, Singapore has a very good credit rating. The long-term credit ratings of the country as awarded by the four largest credit rating agencies are shown in the table below.

Moody's S&P FITCH R&I
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More Facts About Singapore’s Debt

  • You could wrap $1 bills around the Earth 2,314 times with the debt amount.

  • If you lay $1 bills on top of each other they would make a pile 64,925 km, or 40,342 miles high.

  • That's equivalent to 0.17 trips to the Moon.

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