Hong Kong’s financial landscape has recently received a significant boost, as evidenced by the affirmation of its credit ratings by two major credit rating agencies, S&P Global Ratings and Moody’s Investors Service, on May 27, 2025. This development is crucial for investors, businesses, and the general public, as it reflects the city’s economic resilience and fiscal health amidst global uncertainties.

S&P has maintained Hong Kong’s credit rating at AA+ with a stable outlook, while Moody’s has upheld its Aa3 rating and notably upgraded its outlook from negative to stable. This positive assessment is further complemented by Fitch, which has also affirmed Hong Kong’s credit rating with a stable outlook. These ratings are not just numbers; they signify the confidence that these agencies have in Hong Kong’s ability to meet its financial obligations, which is essential for attracting investment and fostering economic growth.

The affirmations from S&P and Moody’s highlight several key aspects of Hong Kong’s credit profile. One of the most significant factors is the city’s substantial fiscal reserves, which provide a buffer against economic shocks. The Hong Kong government has implemented measures to maintain a robust fiscal situation, even in the face of pandemic-related pressures. The 2025-26 Budget outlines a reinforced fiscal consolidation program that focuses on controlling expenditures and enhancing revenue generation. This proactive approach aims to restore balance to government accounts, ensuring that the city remains financially stable.

Recent data supports the notion of resilience in Hong Kong’s economy. There has been a notable increase in bank deposits, indicating public confidence in the financial system. Additionally, the capital markets are active, with a thriving initial public offering (IPO) market that has seen fundraising significantly increase compared to the previous year. This uptick in IPO activity is a positive sign, suggesting that businesses are looking to expand and invest in the future.

Looking ahead, projections indicate that the Operating Account is expected to be largely balanced in the current financial year, with a return to surplus anticipated in the 2026-27 financial year. The Capital Account, which encompasses investments such as the Northern Metropolis development, will utilize market resources flexibly, including public-private partnerships and bond issuances, to expedite projects. The deficit in the Capital Account is projected to gradually decrease starting from the 2026-27 financial year, further enhancing the city’s fiscal health.

Overall, the Consolidated Accounts, which include proceeds from bond issuances, are expected to return to a surplus by the 2028-29 financial year. Fiscal reserves are projected to remain well above $500 billion over the next five years, providing a strong foundation for future economic stability and growth.

The broader economic context also plays a vital role in understanding Hong Kong’s credit ratings. The city experienced robust growth in the first quarter of the year, despite challenges such as the ongoing tariff war. However, recent easing in international trade tensions has slightly alleviated some of the external unfavorable factors. The continued high-level opening up of the Mainland and its steady economic growth, supported by ample policy room, are seen as strong backing for Hong Kong’s economic development.

The Hong Kong SAR Government expresses confidence in its ability to address external challenges while seizing new opportunities. The government remains committed to leveraging Hong Kong’s institutional advantages under the “one country, two systems” framework, reinforcing its status as an international financial, shipping, and trade center. Furthermore, significant efforts are being made to promote Hong Kong’s development as an international innovation and technology center, which is expected to drive high-quality, sustainable economic and social development.

In summary, the affirmation of Hong Kong’s credit ratings by S&P and Moody’s is a testament to the city’s economic resilience and fiscal prudence. The government’s proactive measures, coupled with a robust financial system and positive economic indicators, position Hong Kong favorably for future growth. As the city navigates the complexities of the global economy, its commitment to maintaining fiscal health and promoting innovation will be crucial in sustaining its status as a leading international financial hub.