Fitch Ratings maintains Macau's "AA" credit rating with stable outlook

In its recent assessment, Fitch Ratings has maintained Macau's credit ratings at "AA" with a ‘stable outlook’. The news was announced by the Monetary Authority of Macao (AMCM), citing a report from the international rating agency.

The "AA" rating, the third-highest rating, is attributed to Macau's robust fiscal and external positions, along with the government's adherence to prudent fiscal management during economic adjustments, according to Fitch.

As per the rating agency, the city’s strong public and external finances demonstrated fiscal prudence even during periods of economic and gaming revenue shocks.

Expectations for Macau's economic outlook remain positive, with the tourism sector showing steady recovery and non-gaming investments contributing to growth, as noted by the ratings agency.

The "AA" rating signifies a very strong fiscal position for meeting financial commitments and low expectations of default risk, owing to the capacity to withstand foreseeable events in a non-vulnerable manner.

Similar to last year's assessment, Fitch highlighted factors limiting Macau's rating from being higher, including its narrow economic base, heavy reliance on gaming tourists from mainland China, and susceptibility to policy shifts that may affect China's stance on gaming tourism.

Fitch's forecast for Macau's gaming industry growth anticipates a strong performance of around 15% in 2024, with gross gaming revenue projected to recover to about 79.5% of the 2019 level, following a 62.6% recovery in 2023.

“The economy rebounded sharply by 80.5 percent in 2023 after a 21.4 percent contraction in 2022,” the agency said.

Additionally, Fitch anticipates that Macao's budget will rebound to a surplus of 3.8% of GDP in 2024, marking a significant increase from a modest 0.6% recorded last year.

The recovery was attributed to increased inbound tourism and gaming operators' non-gaming investments, aligned with their concession terms extending to 2033.