Fitch affirms Hong Kong's AA- credit rating and stable outlook

Fitch maintains Hong Kong's AA- credit rating and stable outlook, recognizing the city’s credit fundamentals, including large fiscal buffers, robust external finances and a low level of fiscal debt.

Hong Kong's financial system remains robust, with a consistently healthy level of overall asset quality in the banking sector according to international standards. Bank deposits have continued to grow.

As of the end of March, the total amount of bank deposits in Hong Kong was near HK$18 trillion (US$2.31 trillion), marking an 11% year-on-year increase.

The capital markets in the city are active. For the stock market, the Hang Seng Index rose 18% last year and has increased by over 15% since the beginning of this year.

The total market capitalization of Hong Kong stocks has exceeded HK$41 trillion (US$5.26 trillion). The average daily turnover in the first four months of 2025 surpassed HK$250 billion (US$32.05 billion), representing a 144% increase compared to the same period last year.

The initial public offering (IPO) market is also thriving, with cumulative funds raised exceeding HK$60 billion (US$7.69 billion). In May, Hong Kong Exchanges & Clearing welcomed the world's largest IPO activity so far this year.

The fiscal situation of the Hong Kong Special Administrative Region Government has remained robust. In the 2025-26 Budget, reinforced fiscal consolidation was set out.

The Operating Account is expected to be largely balanced in this financial year and will return to surplus in the next financial year, i.e. 2026-27.

The Capital Account mainly involves capital works expenditure, which represents investments for the future, such as the development of the Northern Metropolis. Therefore, the Government will make flexible use of market resources, including increasing the scale of bond issuance, to fast-track the related projects.

Even if so, the level of deficit in the Capital Account will gradually decrease starting from the 2026-27 financial year.

Overall, after counting the proceeds from bond issuance, the Consolidated Accounts will return to surplus in the 2028-29 financial year.

Despite international trade tensions, the Mainland's economy has continued to grow steadily, supported by more proactive fiscal policies and moderate expansionary monetary policies. These will benefit the trade performance in Hong Kong and the region.

Meanwhile, the Mainland's high-level two-way opening up, as well as its pursuit of green transition, innovation and technology, and digital economy, will continue to create business and investment opportunities for Hong Kong.

Leveraging its unique advantages of connecting with both the Mainland and the rest of the world under the “one country, two systems” arrangement, Hong Kong attracted more Mainland and international companies to establish international headquarters, research and development centers and regional offices in the city to expand their global business. In 2024, the number of companies in Hong Kong with parent companies located outside the city increased to nearly 10,000, reaching a new historical high.

As a “super connector” and “super value-adder”, Hong Kong will continue to actively link the Mainland with the world. While reinforcing connections with traditional markets, Hong Kong will also forge more economic and investment networks with new markets, particularly those in the Global South.

Furthermore, Hong Kong will deepen integration with the Guangdong-Hong Kong-Macao Greater Bay Area, enabling the city to open up new growth points and inject greater impetus into its economy.