Moody’s on Wednesday (Dec 6) downgraded its outlook on Hong Kong from secure to unfavorable, a day after reducing China’s credit score outlook citing prices to bail out native governments and state corporations or to regulate its property disaster.
The downgrade in Hong Kong’s outlook displays an evaluation of tight political, institutional, financial and monetary hyperlinks between Hong Kong and China, Moody’s stated.
Hong Kong dismissed the choice on these grounds.
“We disagree with its decision to change Hong Kong’s credit outlook to “unfavorable”, it said, adding that the ties with China were “a supply of power for long-term growth.”
The rankings company affirmed Hong Kong’s Aa3 rankings, reflecting credit score strengths akin to a rich and aggressive economic system, fiscal and exterior buffers and a monitor file of efficient financial and financial coverage.
Following the imposition of a National Security Law in 2020 and modifications to Hong Kong’s electoral system, Moody’s stated it “expects further erosion of the (city’s) autonomy of political, institutional and economic decisions to continue incrementally”.
It stated a weakening development in mainland China would have an effect on Hong Kong’s economic system, whereas “weaker growth in Hong Kong could erode the government’s fiscal buffers.”
The rankings company individually additionally lowered the outlook on Macau to unfavorable from secure.
Last month, Hong Kong’s authorities revised down the full-year financial development forecast to three.2 per cent from an earlier estimate of a 4.0 per cent to five.0 per cent vary.
https://www.channelnewsasia.com/business/hong-kong-economy-moodys-cuts-outlook-3969546
