According to a press release of Fitch Ratings on 4 September 2015, although Macao’s economy continued to contract in the second quarter of 2015, the rating agency affirms Macao’s credit rating at “AA-” with a stable outlook attributable to the SAR’s strong sovereign balance sheet and external position. While the local economy has entered into a phase of adjustment, the credit rating highlights the capability of the Macao SAR Government to maintain its creditworthiness.

Fitch points out the key factors supporting the Macao SAR Government’s overall creditworthiness, which include:

1. The Macao SAR Government has strong external position and maintains its debt-free status. Fiscal reserves and accumulated surpluses exceed 100% of Macao’s gross domestic product and is enough to almost cover six years of expenditures at the 2015 level budgeted by the Government. The sturdy fiscal position will provide the SAR Government significant policy space to accommodate economic adjustment and promote economic diversification.

2. Fitch expects gaming revenues to stabilise in the second half of 2015. The rating agency also expects that new tourism facilities due to be completed in the next few years could boost more tourist arrivals, expand the market, and benefit economic diversification.

3. In regard to financial stability, prudential operations of Macao’s banking sector support its asset quality and relatively healthy capitalisation.

Based on its expectation for relatively stable gaming revenues in the second half of the year, Fitch maintains its forecast on Macao’s economy to shrink by 16% in 2015.