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Macao disagrees with Moody's cutting its credit outlook to 'negative'

Global Times

By Global Times Published: Dec 07, 2023 12:19 PM

The Macao SAR government said it disagrees with Moody's decision to downgrade the region's credit outlook from "stable" to "negative" on Wednesday.

According to the statement, the Monetary Authority of Macao emphasizes that the Macao Special Administrative Region (SAR) still adheres to prudent fiscal management during the period of economic adjustment, and the city's abundant foreign exchange reserves have shored up the Macao SAR's ability to respond to and withstand external risks.

The SAR government does not have any debt burden, its public finances, external revenue and expenditures and financial conditions are very stable, and the asset quality and capital levels of its banks remain solid, the bureau added.

The response of the Macao SAR came after Moody's change on Macao's credit outlook from "stable" to "negative", one day after the rating agency cut the credit outlook for the Chinese mainland.

The outlook said it reflects Moody's assessment of tight institutional, economic and financial linkages between Macao and the Chinese mainland.

However, Macao SAR said with the full resumption of personnel exchanges between Macao and neighboring regions, and the number of tourists having gradually returned to normal, the rebound in external demand has driven a steady recovery of Macao's economy.

The Macao SAR said it will continue a series of tourism promotion and publicity activities, coupled with the orderly progress of non-gaming investment projects by gaming concessionaires, which will effectively improve Macao's international competitiveness and enrich its role as a global tourism and leisure center.

China has the confidence and capability to achieve long-term stable development, and continuously bring new impetus and opportunities to the world, the country's top economic planner said on Wednesday, after Moody's moved to cut its outlook on Chinese government credit ratings to negative from stable on Tuesday.

The strong resilience, huge potential, room for maneuver and sound fundamentals of the country's economy remain unchanged. China is the single largest engine of global growth and will contribute about one-third to the world's economic growth this year, an official with the National Development and Reform Commission said in a statement.

IMF estimates that China will contribute more than 30 percent to global economic growth this year.

Macao's close economic ties with the Chinese mainland provide a strong support for Macao's long-term development. Against the background that global economy is currently facing complex challenges with multiple uncertainties, the GDP growth of Chinese mainland in the first three quarters of 2023 reached 5.2 percent, which will have a positive impact on Macao's economic performance this year, the Macao SAR said.

The government of the Hong Kong SAR on Wednesday said it disagrees with a Moody's report that changes its credit outlook to "negative" from "stable", saying the linkage with the Chinese mainland should not be a rating constraint as it is a source of strength for Hong Kong.