Moody's affirms Macau's 'Aa3' rating on strong fiscal position
Moody’s Investors Service has reaffirmed the Macao Special Administrative Region’s (SAR) local and foreign currency issuer credit rating at ‘Aa3’, while maintaining a negative outlook. The ratings agency has cited the city’s strong fiscal reserves which have grown to MOP$624 billion (US$77.2 billion) as of March 2025.
What is an Aa3 rating?
An Aa3 rating from Moody’s is considered a high-quality, investment-grade rating indicating very low credit risk. The rating is the fourth highest in Moody’s long-term corporate obligation scale—a solid vote of confidence from one of the world’s top rating agencies. It indicates a very low probability of default. The solid rating comes on the back of Macao’s strong fiscal reserve, at MOP$624 billion, it is five to six times larger than the government’s annual expenditure.
In a recent note, Moody’s said the SAR’s “large fiscal and external reserves provide the economy with very strong buffers to absorb shocks and negative long-term trends including a structural slowdown in China’s economy.”
Maintains negative outlook
However, the agency has warned that Macau’s close ties to mainland China have led to the negative outlook. Moody’s has warned that any downturn in China could spill over into Macau. This is especially because Macau’s dominant gaming industry thrives on mainland visitors. “In turn, tax revenues from the gaming sector account for the majority of the SAR’s total government revenue,” the analysts said.
“The negative outlook on China’s rating therefore implies a negative outlook on Macau’s rating.” While the negative outlook translates to a rating upgrade being a distant dream, a stabilisation of the outlook on China’s rating could lead to a stable outlook for Macau, the analysts noted.
Analysts on Macau’s GGR
In its latest update, investment bank Citigroup has raised its gross gaming revenue (GGR) forecast for Macau in May 2025. The new estimate stands at MOP21.25 billion ($2.63 billion), up from MOP21 billion. The upgraded projection comes on the back of stronger-than-expected performance for the week of 19-25 May, which has been attributed to the newly opened Capella at Galaxy Macau. The addition of the new 5-star hotel, which was described as “a serene oasis in the centre of a bustling city,” has further solidified Galaxy Macau’s position as a leading luxury resort.
In related news, despite Macau’s gaming sector posting a surprise uptick in GGR for April 2025, CreditSights has warned that the city remains on a difficult path to achieving its ambitious full-year revenue target. Macau’s Gaming Inspection and Coordination Bureau (DICJ) reported a 1.7 percent rise in total gaming revenue for April 2025, defying market expectations of a decline.
