(Xinhua)13:27, June 28, 2020
HONG KONG, June 28 (Xinhua) — International credit rating agency Standard Poors (SP) has affirmed its AA+/A-1+ issuer credit ratings on Hong Kong and maintained the outlook as stable.
SP Global Ratings affirmed on Friday its AA+ long-term and A-1+ short-term issuer credit ratings on Hong Kong. The outlook remains stable, and the transfer and convertibility assessment is unchanged at AAA, the agency announced in its latest report on Hong Kong.
It said Hong Kongs economy will likely suffer another deep contraction this year as the COVID-19 pandemic has increased pressure on the services and trade sectors, and the fiscal deficit is expected to widen with the roll-out of additional fiscal stimulus.
(B)ut for now fiscal buffers remain sufficient to absorb the credit impact of these measures, it pointed out.
The stable outlook reflects SPs expectation that economic conditions will stabilize and recover from the COVID-19 pandemic and that political developments between the Chinese mainland and Hong Kong Special Administrative Region (SAR), as well as between the United States and Hong Kong SAR, will not fundamentally jeopardize Hong Kongs economic development, it said.
The stable outlook reflects our expectation that Hong Kongs strong economic and financial metrics will still allow the governments creditworthiness to withstand the fallout from prolonged social tensions and the COVID-19 pandemic over the next one to two years, it said.
It also reflects our expectation that institutional changes as a result of the impending national security legislation will not affect Hong Kongs autonomy in setting economic policies as laid out in the Basic Law, it added.
Under the one country, two systems principle, Hong Kong enjoys autonomy in important institutional matters that affect the governments creditworthiness, including the ability to manage its own finances and set macroeconomic, financial and trade policies, it said.
We continue to expect the central government of China and the territorys government to maintain Hong Kongs autonomy in these matters, as outlined in the Basic Law.
SP said it does not expect any changes to trade relations between the United States and Hong Kong SAR to seriously jeopardize the territorys financial sector development and economic growth.