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Moody’s affirms Macau’s Aa3 issuer rating

Moody’s Investor Service on Wednesday affirmed Macau’s Aa3 issuer rating, and changed the outlook to stable from negative.

According to a note from the ratings agency on Wednesday, factors driving the rating affirmation was based on: Macau’s financial buffers, which remained intact even after recent economic downturn; progress on diversification, bolstering more resilient GDP growth, and; the loosening of fiscal policy which helped prevent a longer downturn without eroding fiscal reserves.

“The government's increase in spending on social welfare, education and training and capital expenditures have supported non-gaming sectors, partly offsetting the decline in gaming,” said Moody’s.

The agency said it expects continued economic recovery over the next few years, but will still be vulnerable to policy developments from China.

“We expect Macao's economic recovery to endure over the next two to three years, supported by the ongoing diversification towards non-gaming activities.

However, Macao will remain exposed to a number of potential shocks, particularly those related to economic, financial and policy developments on the mainland,” said the ratings agency.

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