Hong Kong has received affirmation of its positive credit profile from major international rating agencies, with S&P and Moody’s maintaining their AA+ and Aa3 ratings, respectively.
Both agencies cited the special administrative region’s substantial fiscal buffers, robust foreign exchange reserves, a strong external balance sheet and high per-capita income levels.
Moody’s also raised its outlook for the SAR to “stable” from “negative”, while S&P kept its “stable” outlook unchanged. Fitch recently maintained Hong Kong’s “AA-” rating and “stable” outlook, noting the city’s strong credit fundamentals, low government debt and resilient banking system.
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Financial Secretary Paul Chan Mo-po said in a social media post on Tuesday the “stable” outlooks from the three agencies demonstrate the resilience and strength of the city’s economic and financial system amid increasing global uncertainties.
The vibrancy of Hong Kong’s financial markets and its success in attracting overseas investment have shown that international investors and companies are confident in the city’s economic prospects, he said.
Moody’s emphasized that Hong Kong’s effective policy framework, coupled with the resilience of its economy and financial system, will uphold its creditworthiness despite global trade tensions and slower trade growth.
S&P highlighted the improved policy flexibility and effectiveness of the SAR government, noting that the Linked Exchange Rate System has remained a stabilizing force for the financial system during periods of volatility.
While the global tariffs war continues to weigh on the local economy, the recent easing of trade tensions has slightly alleviated unfavorable external factors, the SAR government said in response.
Swiss financial services firm UBS revised its latest full-year forecast for Hong Kong’s economic growth, raising it to 2.2 percent from 1 percent, adding that the impact of trade tensions on the city’s economy has weakened following the suspension of China-US tariffs.
Hong Kong’s economy posted robust growth in the first quarter of 2025, with GDP showing a year-on-year increase of 3.1 percent. This marks an improvement of 0.6 percentage points from the fourth quarter of 2024 and the highest quarterly growth in five quarters.
READ MORE: Fitch affirms Hong Kong’s ‘AA-’ credit rating, ‘stable outlook’
The SAR government said S&P and Moody’s have also recognized its substantial fiscal reserves.
Despite pressure on public finances following the COVID-19 pandemic, the government has implemented measures to maintain fiscal strength.
The 2025-26 Budget outlined a fiscal consolidation strategy emphasizing expenditure control and revenue generation to gradually restore balance. Consolidated accounts are expected to return to a surplus in the 2028-29 financial year, with fiscal reserves projected to remain above HK$500 billion ($63.8 billion) in the next five years.
Contact the writer at irisli@chinadailyhk.com
