Fitch Ratings maintained the sovereign ratings of Hong Kong citing strong public finance and resilient economy.
The agency affirmed the ratings at ‘AA+’ with a ‘stable’ outlook.
Fitch said the ‘AA+’ ratings were supported by its exceptionally strong public and external finances, high income levels, and a resilient and flexible economy.
However, the ratings were principally constrained by the territory’s deeper integration with lower-rated mainland China.
Despite active fiscal policy response to slowing economy, public finances are a clear strength, the agency noted. Fitch forecast a budget surplus of 0.8 percent of GDP in FY 2019-20.
The agency cautioned that Hong Kong’s economy is vulnerable to further escalations in US-China trade tensions. Nonetheless, the current account surplus is expected to remain strong this year, at around 5 percent of GDP.
Hong Kong’s GDP is expected to advance 1.6 percent in 2019, which is below the official 2-3 percent forecast range.
The material has been provided by InstaForex Company – www.instaforex.com