Moody’s Ratings has changed the outlook on Macau SAR to stable from negative, while affirming its Aa3 sovereign rating, citing improved expectations for mainland China and the city’s strong fiscal position supported by gaming and tourism revenues.
The decision follows Moody’s move to affirm China’s A1 rating and revise its outlook to stable, reflecting what it described as ‘very tight‘ economic, political, and institutional linkages between Macau and the mainland. These connections, particularly through tourism and gaming, are expected to keep Macau’s rating within one notch of China’s credit profile.
On the Tuesday note, Moody’s said Macau’s Aa3 rating continues to be underpinned by ‘significant credit strengths,‘ including high per capita income, the absence of government debt, and substantial fiscal reserves. At the end of 2025, fiscal reserves stood at approximately MOP667 billion ($83.4 billion), equivalent to five to six times annual government expenditure, providing what the agency described as ‘very strong buffers‘ against external shocks.
The agency also highlighted Macau’s large foreign exchange reserves, which reached $30.6 billion at the end of 2025, or around 15 months of import cover. These reserves have been supported by sustained current account surpluses driven largely by the territory’s tourism and gaming sectors.
Under its baseline scenario, Moody’s expects Macau to maintain ‘ample fiscal and external buffers,‘ supported by continued strength in gaming and tourism, even as growth may moderate alongside a structural slowdown in mainland China.
However, the agency noted that risks remain balanced. Potential upside could come from faster-than-expected economic diversification, while downside risks include weaker gaming performance or adverse economic developments in China.
Moody’s added that Macau’s strong governance framework and prudent fiscal management—evidenced by the accumulation of large reserves—support its resilience, despite its high reliance on the gaming sector and exposure to external shocks.
