Moody’s gives Macau stable rating

The credit ratings agency has kept the local economy unchanged and issued Macau with a strong “Aa3 stable” rating.

Macau.- Credit ratings agency Moody’s Investors Service has issued Macau with a strong “Aa3 stable” rating and has cited the absence of government debt and fiscal surpluses as key factors that supported the build-up of large fiscal reserves.

Moody’s said on Tuesday that the stable outlook reflected the city’s prospects for more growth ahead, while the large financial buffers protect Macau from sudden external shocks. “Such shocks would likely stem from economic, financial and policy developments in China,” the company said.

However, Moody’s warned: “Macau remains susceptible to potential policy measures in China. For example, a further tightening of China’s anti-corruption crackdown and/or the introduction of gambling on the mainland would weaken gaming and tourism in Macau. As a small, open and concentrated economy, Macau’s GDP growth will remain volatile.”

The ratings agency also expects growth recovery to continue in the next two to three years on the back of growing gaming and non-gaming tourism.