Fitch Ratings keeps Macau’s long-term credit rating at ‘AA’

In its latest assessment, Fitch Ratings announced on Friday that Macau’s economy maintains its credit ratings (long-term foreign and local currency issuer default ratings) at “AA” with a “stable” outlook, the Monetary Authority of Macao (AMCM) announced, citing a report from the international rating agency.

The “AA” rating is the third highest rating (after AAA and AA+) and is based on its exceptionally strong fiscal and external positions, as well as the “Macau government’s adherence to prudent fiscal management during economic adjustments,” Fitch says.

The ratings agency also said to expect the local economic outlook to be bolstered by the steady recovery of the tourism sector as well as its non-gaming investments.

The “AA” category indicates a very strong fiscal position for payment of financial commitments and the capacity to resist foreseeable events in a non-vulnerable way, which makes expectations of default risk very low.

The agency had attributed the very same rating to Macau in late March last year.

As in last year’s review, Fitch noted that Macau’s rating cannot be much higher due to the narrow economic base, high concentration of gaming tourists from mainland China (A+/Stable), and vulnerability to policy shifts that may affect China’s treatment of gaming tourism.

Fitch also forecast, in relation to gaming and tourism recovery, that Macau’s growth “will remain strong at about 15% in 2024 based on our assumption that gross gaming revenue will further recover to about 79.5% of the 2019 level this year from 62.6% in 2023.”

The agency also noted the sharp rebound of the local economy by 80.5% in 2023 after a 21.4% contraction in 2022, saying, “we expect the economic and gaming outlook to be bolstered by a further rise in inbound tourism and gaming operators’ non-gaming investments as part of their mandate over their decade-long concession term through to 2033.”