Moody’s and Fitch have reduced Hong Kong’s rating to negative, but S&P, one of the world’s three major rating agencies, maintained its outlook for “stable" and confirmed Hong Kong’s long-term credit rating as “AA+"
The short-term credit rating is confirmed as “A-1+” and it is expected that Hong Kong will vigorously counter the downward pressure on the economy brought about by demonstrations. However, Standard & Poor’s also pointed out that social unrest continues to undermine policy efficiency. If tensions persist, causing sudden changes in the relationship between the central government and the SAR government, it will reduce policy predictability, and the S&P will downgrade Hong Kong. In addition, if the Hong Kong economy continues to slow down, resulting in a significant deterioration in external and financial conditions, it will also consider lowering the rating.
Standard & Poor’s said that the outlook for Hong Kong is “stable" and that the financial and financial indicators of the Hong Kong government are still quite strong and can withstand the effects of social unrest in the next two to three years
In order to alleviate the slowdown in economic growth, S&P expects the authorities to increase fiscal expenditures for short-term stimulus measures and implement a policy of addressing the long-term supply shortage in the property market.
Standard & Poor’s believes that the recent demonstrations in Hong Kong have a greater impact on real estate-related industries and may continue for some time, while tourism, retail sales and consumption are also dragged down. Trade performance is mainly affected by the slowdown in global trade growth, but financial markets. The correlation with the demonstration is not too high and the impact is relatively small. It is expected that the “one country, two systems" will remain unchanged for 50 years in accordance with the Basic Law. The bank expects that the Fed will cut interest rates once again this year. Hong Kong will benefit, interest rates will remain low for a long time, and borrowing costs will be low. If the political environment improves significantly, the society returns to stability, and the central government’s credit rating improves, it will make Upgraded to Hong Kong.
Last month, Fitch downgraded Hong Kong’s long-term foreign currency credit rating by one level, from “AA+" to “AA", and the rating outlook was “negative"
Moody’s also announced that it would reduce its rating outlook from “stable" to “negative", but maintain the current The credit rating of Hong Kong remains unchanged at “Aa2″.
A spokesman for the HKMA pointed out that the Standard & Poor’s said that Hong Kong still has a strong economic and financial tone, which will enable the credit situation to be maintained in the future and recognize that “one country, two systems" and the rule of law will continue in Hong Kong. In addition, the spokesman also welcomed the S&P’s confirmation of the Linked Exchange Rate System (LERS) to maintain Hong Kong’s monetary policy security and financial stability.