Moody’s Ratings has updated its outlook for Macau from negative to stable and affirmed its local and foreign currency issuer rating at Aa3 – a reaction to the agency’s decision this week to change China’s outlook from negative to stable with an A1 rating.
In a Tuesday filing, Moody’s said its decision to mirror China’s outlook while keeping the Macau rating one notch above China reflects its assessment of very tight economic, political and institutional linkages between Macau and the mainland. As such, the stable outlook on China’s rating implies a stable outlook on Macau’s rating.
Moody’s had earlier pointed to China’s ability to keep growing despite property-sector stress, weak consumption and global tensions as key to its revision for the mainland, with growth slowing gradually but not collapsing.
In retaining Macau’s Aa3 rating, Moody’s said the SAR boasts significant credit strengths, including very high per capita income and the absence of outstanding government debt. Likewise, its large fiscal and external reserves provide the economy with very strong buffers to absorb shocks and address negative long-term trends including a structural slowdown in China’s economy.
“Macau has very strong economic linkages with mainland China, particularly in tourism and gaming,” the agency said.
“Moreover, the SAR’s very tight institutional and political linkages with China are a key feature of Macau’s credit profile. We expect these linkages to remain very strong, notwithstanding Macau’s broad autonomy and demonstrated effectiveness of fiscal and macroeconomic policymaking.
“The stable outlook also indicates upside and downside risks to Macau’s credit profile are balanced at the Aa3 level. Under our baseline, we expect Macau to maintain ample external and fiscal buffers, supported by continued strength in the tourism and gaming sector, even as the pace of growth in the sector may gradually slow alongside weaker economic growth in mainland China over the longer term.
“To the upside, Macau’s growth profile may benefit from more rapid progress toward economic diversification than we currently expect. On the downside, Macau is vulnerable to a number of potential shocks, particularly those related to economic, financial and policy developments in mainland China.”
Moody’s noted that Macau’s fiscal reserves have continued to grow post-COVID, reaching MOP$667 billion (US$82.6 billion) – equivalent to between five and six times the government’s annual expenditures – at end-2025.
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