Moody’s and S&P Global keep ‘Aa3’ and ‘AA+’ credit ratings for Hong Kong Moody’s and S&P Global have maintained their “Aa3” and “AA+” credit ratings for Hong Kong, with both agencies citing the city’s substantial fiscal buffers and foreign exchange reserves, strong external balance sheet and high per capita income levels. Moody’s also upgraded the city’s outlook from “negative” to “stable”. Their grades on Tuesday came after Fitch maintained its “AA-“ credit rating and “stable” outlook for Hong Kong last week. Aa3 is the fourth-highest rating on Moody’s scale, while S&P Global’s AA+ is the second highest. They both signify very low credit risk and indicate that the issuer has a strong capacity to repay its debts. Moody’s also pointed to the resilience of the city’s economy and financial system at a time of trade tensions, while S&P noted Hong Kong’s flexible and effective government policies and the linked exchange rate, which promoted monetary and financial stability. In response, a government spokesman said: “The recent affirmations of Hong Kong’s credit ratings by Fitch, S&P and Moody’s, all with ‘stable’ outlooks, demonstrate Hong Kong’s resilience in maintaining stability amid increasing global economic and financial uncertainties. “Recent data has further underscored the robustness of Hong Kong’s financial system. Bank deposits have continued to grow, capital markets remain active and the IPO market is thriving, all of which signal global investors’ confidence in Hong Kong.” He said IPO fundraising had already exceeded HK$76 billion (US$9.7 billion) in 2025, more than seven times the amount raised in the same period last year, and nearly 90 per cent of the total for 2024. The spokesman stressed that despite pressures on public finances, the government had taken a series of steps to maintain a healthy fiscal position. In the previous financial year, the city’s deficit stood at HK$80.3 billion, based on a revised estimate unveiled in late April. The change, from an earlier estimate of HK$87.2 billion, was attributed to increased stamp duty income on stock trading and lower-than-expected departmental expenditure. The spokesman said the operating account was expected to return to a surplus from the next financial year, while the deficit in the capital account, which mainly involved capital works expenditure such as the Northern Metropolis, would gradually decline with the help of public-private partnerships and bond issuance. Taking into account bond issuances, the government’s consolidated account was expected to return to a surplus in 2028-29, with the fiscal reserves to remain at about HK$500 billion over the next five years. Without taking into account bond issuances, the consolidated account will record a HK$59 billion deficit in 2028-29 and a HK$31 billion deficit in 2029-30, according to a medium-range forecast released in February. “Hong Kong’s economy saw robust growth in the first quarter of this year,” the spokesman said. “While the tariff war continues to affect the global economy, the recent easing in international trade tensions has slightly alleviated external unfavourable factors and uncertainties. “The mainland continues to advance high-level opening up, with steady economic growth supported by ample policy room and tools to address and resolve various risks and challenges. “With breakthroughs and expedited developments in technology innovation, green transformation and the digital economy, the mainland offers the greatest backing for Hong Kong’s economic development.” Economics professor Terence Chong Tai-leung of the Chinese University of Hong Kong said the latest ratings and outlooks were “fair and reliable”, noting that all three agencies gave similar grades. He pointed to the rebound of Hong Kong stocks in March and April and HK$219 billion in investment income from the Exchange Fund last year. Chong said the latest ratings also implied that Hong Kong’s cost for bond issuance would be lower, which would save the city hundreds of millions of dollars. Kevin Tsui Ka-kin, chief economist of Orientis, meanwhile, was more sceptical about the revised outlook. Tsui acknowledged that the stock market and IPO market had improved but he had reservations about a significant boost in revenue and investors’ confidence. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3312016/moodys-and-sp-global-keep-aa3-and-aa-credit-ratings-hong-kong (ICE HONG KONG)

Fonte notizia: South China Morning Post