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Hong Kong's credit outlook cut to negative from stable: S&P

Thursday, March 31, 2016 - 18:04

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Hong Kong's credit outlook was cut to negative from stable by global ratings agency Standard & Poor's on Thursday, citing economic imbalances in China.

[HONG KONG] Hong Kong's credit outlook was cut to negative from stable by global ratings agency Standard & Poor's on Thursday, citing economic imbalances in China.

The city's 'AAA' long-term and 'A-1+' short-term issuer credit ratings were left unchanged however.

"Our outlook revision on Hong Kong reflects our similar action on the People's Republic of China... which reflected economic imbalances in China that are unlikely to diminish at the pace we previously expected," S&P said in a statement.

The ratings agency also warned that if ongoing political tensions over democratic reforms and a growing grassroots push by radical protesters seeking greater autonomy from China grew, it might impact Hong Kong's long-term rating.

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"We might lower our rating on Hong Kong without a downgrade of China, if Hong Kong's political polarisation worsens to a point where it compromises policymaking and the business environment," S&P said.

"In such a scenario - which is not our base case - we would expect a gradual deterioration of (Hong Kong's) above-average growth, healthy fiscal reserves, and strong external position."

REUTERS

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