Norway & Singapore: Ratings Supported by Sovereign Wealth Funds

Norway and Singapore are both AAA-rated sovereigns whose credit fundamentals are supported by the strength of their respective public sector balance sheets. Both sovereigns have accumulated large fiscal surpluses for several decades and have established sovereign wealth funds (SWF) to invest these surpluses into a diverse range of foreign assets. As it stands, Norway’s fund is valued at USD 1 trillion, while Singapore’s SWF is estimated to be USD 440 billion. Both governments are taking a long-term view on the inter-generational distribution of assets. The SWFs are both a current source of income (supplementing the annual budget) and a future source of resilience (buffering shocks during downturns).