external debt borrowing, the relatively high ranking of Taiwan's sovereign rating is
an important indicator of the government's good standing and credibility. Taiwan's
high credit ranking undoubtedly enhance its fiscal space.
Sources: Expansion (2016). Figure drawn by the author. Also see Appendix C1.
Figure 7 Sovereign Credit Rating
Average of Moody's, S&P, and Fitch, 140 Countries
3. If there is a space, just use it!
In Sections 2, 3, and 4, we have shown that Taiwan has some fiscal space
for expanding either its government deficit or public debt or both,
4
and Section
5 shows that Taiwan's government credit rating is at a good standing. In view of
4
Note that, we are talking about "if there is a space, then use is." This is different from "make a space, and
use it." To make a space, government should reduce expenditure, increase efficiency, increase tax, reduce
government debt or increase government surplus, and reduce public debt. Generally speaking, the space
expands during the economic upturn and shrinks during the economic downturn.
Prime
0~1
High grade
1~4
Upper medium grade
4
ä
7
Lower medium grade
7~10
Speculative 10~13
Highly speculative 13~16
Substantial risks 16~19
Extremely speculative 19~21
In default with little prosp 21~22
In default 23~25
Some country names
#of countries
Credit rating
0
11
12
16
23
19
49
9
0
1
0
10 20 30 40 50 60
Taiwan
4.3, #24
US
Th Tw HK
Gre
Ph Ch UK
Ukr
In Jn Fr
Gr
.
Con .
Ve ,
Re Ind Ma Ko Sgp
10 9 8 7 6 5 4 3 2 1
106
