Rating agencies Moody's and S&P Global maintain 'Aa3' and 'AA+' ratings for Hong Kong, respectively, indicating a strong capacity to meet financial commitments despite political uncertainties.
Hong Kong Maintains High Credit Ratings and Stable Outlook Amid Global Economic Uncertainties
Credit rating agencies Moody's and S&P Global have affirmed their "Aa3" and "AA+", respectively, for Hong Kong's creditworthiness. Both agencies cited the city's substantial fiscal reserves, strong external balance sheet, high per capita income levels, and resilient economy and financial system as key factors underpinning their ratings.
Moody's has upgraded Hong Kong's outlook from "negative" to "stable." This follows Fitch's decision last week to maintain its "AA-" credit rating and "stable" outlook for the city.
Aa3 is the fourth-highest rating on Moody's scale, while S&P Global's AA+ is the second-highest. Both ratings signify very low credit risk and indicate the city's strong capacity to meet its financial commitments.
Moody's also highlighted the city's economic resilience amid trade tensions, while S&P pointed to the city's flexible and effective government policies and the linked exchange rate that promotes monetary and financial stability.
In response, the government spoke positively about the ratings, stating that they underscore Hong Kong's resilience in maintaining stability amidst increasing global economic and financial uncertainties. The spokesperson also noted that recent data had confirmed the robustness of the city's financial system, with growing bank deposits, active capital markets, and a flourishing IPO market.
The 2025-26 budget focuses on fiscal consolidation, aiming to control expenditures and enhance revenue generation to restore balance to government accounts.
These high credit ratings and stable outlook are reflective of Hong Kong's robust financial system, supported by its substantial fiscal buffers, strong external balance sheet, and high per capita income levels. Additionally, the city's resilient economy and financial system, flexible and effective government policies, and investor confidence contribute to its financial stability.
The high credit ratings of Hong Kong's economy and the affirmation of its stable outlook by agencies like Moody's and S&P Global indicate investor confidence, supported by the city's substantial fiscal reserves, strong external balance sheet, high per capita income levels, resilient economy, flexible government policies, and effective financial system. The city's trade and business sectors also benefit from this financial stability, as it signifies a low credit risk and strong capacity to meet financial commitments.
