Singapore owes more than France relative to GDP. Why does it borrow at half the rate?

France now pays more than Italy to borrow for ten years, and its debt is the reason most often given. Singapore is an awkward test of that explanation: on the IMF’s measure its debt ratio is higher than France’s, yet it borrows at about half the rate. This note sets the two side by side, using figures from before the French parliament’s first budget vote on 20 October 2026.

What is happening in France’s bond market?

France’s 10-year yield closed at 4.79% on 16 October 2026, 137.4 basis points above Germany’s 3.42% (ideal-investisseur, Banque de France and Bundesbank data). On 2 September the gap was 85 basis points. By 2 October it had reached 146.9, the widest in a year.

France 10-year government bond yield, close on 16 October 2026. Intraday on 2 October it reached 4.994%, the highest since 2002 (Reuters via Boursorama)

France is also paying more than Italy, whose 10-year yield was about 4.50% on 16 October (Trading Economics). In July 2025 Italy’s was still the higher of the two. The move comes with a budget fight. The 2027 draft budget aims to bring the deficit from 5.4% of GDP in 2026 to 5.0% in 2027 (Euronews), and Prime Minister Sébastien Lecornu’s government, which has no majority in the National Assembly, faces its first vote on 20 October.

How does Singapore compare on the same yardstick?

On the IMF’s October 2026 figures, Singapore’s gross government debt is higher than France’s and Italy’s. The table uses one source for every economy so that the definitions match (IMF DataMapper). Figures for 2026 are IMF estimates.

Visual guide

How does Singapore compare on the same yardstick?

Gross debt 2026

• France118.5%
• Italy137.9%
• Germany64.6%
• Singapore166.4%
• Japan199.4%
• Hong Kong14.1%

0199.4

Economy	Gross debt 2019	Gross debt 2026	Change	Budget balance 2026	Real growth 2026
France	98.2%	118.5%	+20.3 points	−5.4%	0.4%
Italy	133.9%	137.9%	+4.0 points	−2.9%	0.8%
Germany	58.3%	64.6%	+6.3 points	−4.3%	1.3%
Singapore	127.7%	166.4%	+38.7 points	+3.7%	5.0%
Japan	206.3%	199.4%	−6.9 points	−1.4%	0.7%
Hong Kong	0.3%	14.1%	+13.8 points	−4.4%	3.8%

Debt and balance are general government, % of GDP. Change is CapsWindow’s calculation.

Two things stand out. Singapore’s ratio rose 38.7 points between 2019 and 2026, almost twice as much as France’s. Yet Singapore is the only economy in the table with a budget surplus in 2026, and its growth estimate is more than ten times France’s.

Singapore’s own figures follow a different definition. BIS total credit statistics put central government debt at S$1,311.1 billion at the end of 2025, a gross nominal amount with no assets deducted (BIS). It rose from S$778.0 billion at the end of 2021 to S$1,079.8 billion a year later, a period that began just after Parliament amended the MAS Act in January 2022 to allow reserves to be transferred to the Government through RMGS (MOF). This note does not measure how much of that rise RMGS accounts for.

Who pays more to borrow, and by how much?

On 16 October 2026 Singapore’s 10-year government bond yielded 2.34%, against 4.79% for France (MAS). That is 245 basis points less than France, and 108 basis points less than Germany, a country whose debt ratio is under 40% of Singapore’s.

Date	France 10-year	Singapore 10-year	France minus Singapore
2 September 2026	4.24%	2.43%	181 bp
2 October 2026	4.90%	2.45%	245 bp
16 October 2026	4.79%	2.34%	245 bp

France: Banque de France benchmark closes via ideal-investisseur. Singapore: MAS benchmark SGS, average of primary dealers’ closing bid rates. The gap is CapsWindow’s calculation.

Singapore’s yield barely moved over these six weeks, so nearly all of the 64 basis point widening came from France, whose yield rose 55 basis points.

The usual next check subtracts the policy rate, to see how much of a long yield is a premium over the central bank’s setting. For France, the 10-year yield minus the ECB deposit rate of 2.50% was +229 basis points on 16 October. Singapore cannot be measured the same way. MAS has no policy interest rate and steers the Singapore dollar nominal effective exchange rate (S$NEER) within a policy band, which it left unchanged on 14 October (MAS statement). The table substitutes two reference points. Neither is a policy rate gap.

Measure	France	Singapore
10-year minus policy rate	+229 bp (ECB deposit rate 2.50%)	not applicable: no policy rate
10-year minus overnight SORA	not used	+94 bp (SORA 1.4015% at end-September; SingStat)
10-year minus 2-year, same day	not compiled here	+46 bp (2.34% minus 1.88%, 16 October)

The SORA row mixes dates: the 10-year is from 16 October, SORA from the end of September. Even on the wider of the two references, Singapore’s long yield sits less than 100 basis points above short-term money, while France’s sits 229 above its central bank’s rate.

Why does a higher debt ratio come with a lower yield?

Because the two debt numbers describe different activities. France borrows to cover a budget deficit. Most of Singapore’s borrowing is never spent. “The Singapore Government does not borrow for recurrent spending needs,” the Ministry of Finance says, and it issues debt for specific long-term purposes (MOF):

Instrument	Held by	Purpose, as described by MOF
SGS (Market Development) and T-bills	the market	build a yield curve for pricing private debt; proceeds are invested and cannot be spent
Singapore Savings Bonds	individuals	a long-term savings option
SSGS	CPF Board	invest CPF members’ savings; coupon pegged to CPF interest rates, fully guaranteed by the Government
RMGS	MAS	move official foreign reserves above what MAS needs to the Government for long-term investment
SGS (Infrastructure), under SINGA	the market	the only spending category: nationally significant infrastructure such as the Cross Island Line, within a gross borrowing limit

MOF states that the Government has “no net debt”, that its financial assets are “well in excess of our debt”, and that the investment returns “are more than sufficient to cover the debt servicing costs”. AMRO, the regional macroeconomic surveillance office, estimated in April 2026 that about 99% of Singapore’s government debt is raised for non-spending purposes, and noted that “Singapore has a net asset position which gross debt figures do not reflect” (AMRO).

France’s position runs the other way. Its deficit is 5.4% of GDP in 2026 on IMF figures, and its government expects general government interest costs to rise from €79 billion in 2026 to €91 billion in 2027 (Upside). Each deficit adds to debt that has to be refinanced in the market at whatever yield investors ask.

Two further features may help explain Singapore’s low yields, though this note does not test them. SSGS and RMGS are not traded; they sit with the CPF Board and MAS. And the Singapore dollar is managed along an appreciating band, which may lead investors to accept lower interest in exchange for expected currency strength.

The lesson applies to France too. Its spread over Germany went from 85 to 147 basis points in a month, far faster than any debt ratio moves. What changed was the deficit outlook and the politics of delivering the cuts.

How do the credit ratings compare?

Agency	France (latest action)	Singapore
S&P	A+, stable (29 May 2026)	AAA
Moody’s	Aa3, negative (10 April 2026)	Aaa
Fitch	A+, stable (28 August 2026)	AAA

France’s ratings and dates are from the French Treasury agency (AFT). Singapore’s are as stated by the Ministry of Finance, which links them to the Government’s balance sheet (page last updated 22 October 2025, MOF). The dates of each agency’s latest action on Singapore could not be confirmed from the agencies’ own releases, so they are not shown.

France sits four notches below the top at S&P and Fitch, and three at Moody’s. Here the ratings line up with the yields, but the gross debt ratios do not: the AAA borrower has the higher ratio.

Which numbers are worth watching?

For Singapore, the gross debt ratio is the least informative number in this note. These say more:

• Borrowing that is spent. Only SINGA borrowing funds expenditure, within a legal limit. Its share of the total, not the total itself, is what would change the picture.
• Returns against interest. MOF’s own test is whether returns on invested proceeds keep covering debt service. A 10-year SGS at 2.34% is the current cost of new long-term money.
• Balance and growth. The IMF puts Singapore’s 2026 budget balance at +3.7% of GDP and growth at 5.0%, against −5.4% and 0.4% for France.
• France’s speed. In its own plan, France’s debt goes from 119.3% of GDP in 2026 to 121.7% in 2027, and interest costs from €79 billion to €91 billion.

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