Singapore's economy as well as financial markets remained resilient in 2013, but several downside risks lie ahead, Singapore's central bank said Tuesday.

The global environment could deteriorate, posing uncertainties for Singapore's growth outlook, the Monetary Authority of Singapore said in its Financial Stability Review.

An increase in interest rates could weigh on debt-servicing capacity and in turn affect both property market and the banking system, it noted.

According to MAS, if mortgage rates rise by three percentage points, the share of over-leveraged households could rise to 10-15 percent.

At this juncture, asset quality remains healthy, but this could deteriorate if an unexpectedly sharp rise in interest rates puts a strain on the debt-servicing ability of over-extended borrowers, the bank cautioned.

Looking ahead, the central bank said the risks for Asia's economic growth are tilted to the downside.

"Advanced economies' unconventional monetary policies have made Asia's future growth outlook more uncertain and played a part in its debt build-up," the MAS said.

RTTNews