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dpa
Hong Kong
Credit ratings giant Moody’s on Monday downgraded the Hong Kong government’s financial rating, citing an “absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population.”
Though Moody’s lowered Hong Kong’s rating to Aa3 from Aa2, the agency also returned the city’s outlook to “stable,” having downgraded it to “negative” in September.
The return to stable indicates that Moody’s expects the government’s ample foreign exchange reserves to hold up against the continued economic downturn that the city has experienced since June, when anti-government protests broke out over a now-withdrawn extradition bill that was widely seen as a threat to the city’s autonomy from mainland China.
Moody’s stated that “the absence of an effective response” by the government to the past eight months of social unrest may reflect “weaker inherent institutional capacity” than previously assessed and “may also point to more significant constraints on the autonomy of the Special Administrative Region’s institutions than previously thought.”
Moody’s also highlighted concerns centred on the Hong Kong government’s “notably slow, tentative and inconclusive” responses to underlying societal problems, including housing costs and equality of economic opportunity.
In November, Hong Kong entered a recession for the first time in a decade. Tourism rates plummeted by over 40 per cent and retail and hospitality sectors suffered as a result of the US-China trade war and escalating anti-government protests.
Hong Kong
Credit ratings giant Moody’s on Monday downgraded the Hong Kong government’s financial rating, citing an “absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population.”
Though Moody’s lowered Hong Kong’s rating to Aa3 from Aa2, the agency also returned the city’s outlook to “stable,” having downgraded it to “negative” in September.
The return to stable indicates that Moody’s expects the government’s ample foreign exchange reserves to hold up against the continued economic downturn that the city has experienced since June, when anti-government protests broke out over a now-withdrawn extradition bill that was widely seen as a threat to the city’s autonomy from mainland China.
Moody’s stated that “the absence of an effective response” by the government to the past eight months of social unrest may reflect “weaker inherent institutional capacity” than previously assessed and “may also point to more significant constraints on the autonomy of the Special Administrative Region’s institutions than previously thought.”
Moody’s also highlighted concerns centred on the Hong Kong government’s “notably slow, tentative and inconclusive” responses to underlying societal problems, including housing costs and equality of economic opportunity.
In November, Hong Kong entered a recession for the first time in a decade. Tourism rates plummeted by over 40 per cent and retail and hospitality sectors suffered as a result of the US-China trade war and escalating anti-government protests.
