Fitch Ratings has kept Macau’s long-term foreign and local currency issuer default ratings at AA- with stable outlook, indicates information disclosed by that agency to Macauhub.
In the accompanying explanation Fitch Ratings states that Macau’s credit rating is based on exceptionally strong public and external finances, which continue to strengthen despite three straight years of economic contraction.
On the negative side are the high volatility of Macau’s gross domestic product, high economic concentration in the gaming sector and in tourism from mainland China, and the territory’s susceptibility to changes approved and applied in China.
The agency indicates that Macau’s economy rebounded in the last two quarters of 2016, with growth of 4.4 percent and 7.0 percent in the third and fourth quarters, albeit not enough to prevent the economy from closing the year down 2.1 percent.
In 2017 Fitch anticipates economic growth of 2.5 percent, again supported by increased gaming revenue after the opening of new hotel and gaming establishments.
Macau’s budget maintains a high positive balance despite the economic contraction. Fitch estimates that the positive balance in 2016 was 6.2 percent of gross domestic product and anticipates for 2017 a surplus of 5.6 billion patacas or 1.5 percent of gross domestic product.
In the document sent to Macauhub, Fitch Ratings recalls that Macau has no outstanding government debt, as careful management of during the economic boom years enabled accumulation of large amounts of financial resources, which grew to 137 percent of GDP at end 2016. (Macauhub)