According to a press release published by Fitch Ratings today, the international rating agency upgrades Macao SAR’s credit ratings (long-term foreign and local currency issuer default ratings) to “AA” with a “stable” outlook from “AA-”.
According to Fitch’s rating definitions, ratings in the “AA” category indicate a very strong fiscal position for payment of financial commitments and the capacity is not significantly vulnerable to foreseeable events. Therefore, the expectations of default risk are very low. The rating agency points out that the Macao SAR Government has demonstrated a commitment to fiscal prudence through the period of economic adjustment while the Basic Law, which stipulates the Government to strive to achieve a fiscal balance, provides an important policy anchor to safeguard its medium-term fiscal sustainability. As a result, the notably strengthened fiscal and external balance sheets of Macao are the key factors supporting the rating upgrade.
At end-November 2017, total capital of the Fiscal Reserve stood at MOP487.1 billion, of which comprised a Basic Reserve of MOP128.0 billion and an Excess Reserve of MOP359.1 billion. Macao SAR Government continues to uphold the principle of keeping expenditure within the limits of revenues and improve the management system of fiscal resources in order to ensure the sustainable development of the SAR’s public finance.
Fitch’s press release can be found via this link:
https://www.fitchratings.com/site/pr/10020396