Moody’s Ratings has affirmed the local and foreign currency issuer rating of the Macao SAR Government at Aa3 with a negative outlook, citing the jurisdiction’s strong fiscal reserves which have grown to MOP$624 billion (US$77.2 billion) as of March 2025.
An Aa3 credit rating refers to a high-quality, investment-grade rating indicating very low credit risk. It is the fourth-highest rating in Moody’s long-term corporate obligation scale and means Macau is judged to be of high quality with a very low probability of default.
In a Wednesday note, the ratings agency said the absence of government debt and the presence of large fiscal buffers placed the SAR in a particularly strong position, with its fiscal reserves equivalent to between five and six times the government’s annual expenditures.
“[Macau’s] large fiscal and external reserves provide the economy with very strong buffers to absorb shocks and negative long-term trends including a structural slowdown in China’s economy,” Moody’s analysts said.
However, close ties to mainland China have also led to the negative outlook, with the agency acknowledging the fact that Macau’s dominant gaming industry is highly dependent on demand from China.
“In turn, tax revenues from the gaming sector account for the majority of the SAR’s total government revenue,” the analysts said. “The negative outlook on China’s rating therefore implies a negative outlook on Macau’s rating.”
While the negative outlook means that a rating upgrade is unlikely anytime soon, a stabilization of the outlook on China’s rating would likely lead to a stable outlook for Macau, they added.
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