Most of the countries (21 out of 30) are in the "Safe" category; their fiscal
space is larger than the actual debt ratio. However, four countries
{
Belgium,
France, Spain and Ireland
{
are in the "Caution" category, as their fiscal space
is only slightly higher than their actual debt ratio. One in the Significant Risk
category, as its actual debt ratio is much larger than its estimated fiscal space.
Lastly, four countries–Cyprus, Greece, Italy, and Japan
{
are at Risk, with a zero
fiscal space and a huge debt ratio.
Taiwan's fiscal space bar is specifically filled with dark green and its title and
number circled. It shows that Taiwan's fiscal space had 209.5% in May 2014,
3
whereas its estimated public debt ratio (in 2015) was 32.8%. If the data are more
or less stable, there is an extra fiscal space of 179.7% for Taiwan in 2014-2015.
However, noting that the four countries in the Caution category have debt ratios
of about 100%, we may conjecture that Taiwan can at least expand its actual ratio
cautiously from 32% to about three times more and up to 100%. Combined with
our recommendation from the previous section, it appears that Taiwan can safely
expand its debt conservatively up to 50% without incurring much risk.
2. Government Credit Ratings
Like personal credit ratings, there are several firms publishing sovereign
credit ratings of countries. The three largest ones are Moody's, S&P, and Fitch.
Expansion (2016) has a website summarizing the ratings of these three firms.
Since each firm has a different alphabetic rating system, for convenience, we
have translated the ratings into numerical numbers as shown in Appendix C (the
shaded cells show our estimates).
The Expansion table lists 141 countries, but one country (Grenada) was not
3
Moody's latest dataset is not available to the author.
104
