Global credit ratings firm Fitch Ratings Incorporated has reportedly declared that the economies of several Asian nations with casino gambling are being weakened due to the ‘softening global demand and uncertainty’ created as a consequence of the ongoing trade dispute between the United States and China.
According to a report from GGRAsia, the American organization made the revelation as part of an examination into the third-quarter long-term local currency issuer default rating (IDR) and long-term foreign currency IDR of several countries including South Korea, Singapore and the Philippines.
The Tuesday assessment from Fitch Ratings Incorporated reportedly stated that the slowdowns in the economies of South Korea and Singapore have been ‘especially pronounced’ recently as both are heavily reliant on the electronics sector and are exposed to the ‘global tech cycle and the trade dispute.’ However, the financial services firm determined that the pair had retained their stable outlook with South Korea receiving a score of ‘AA-’ alongside a slightly higher mark of ‘AAA’ for Singapore.
In terms of the Philippines, GGRAsia reported that the inquiry had given the nation of almost 101 million people a ‘BBB’ rating after balancing its ‘net external creditor position and relatively high growth rates’ against the negative impacts of ‘lower per capita income.’ But, the evaluation purportedly predicted that future growth would remain at around 6.3% year-on-year with ‘weaker global growth and escalating United States-China trade tensions’ likely hampering any ‘stronger pickup.’
Despite its casino industry recently experiencing a 1.9% decline year-on-year in aggregated gross gaming revenues for the eight months to the end of August, Macau reportedly kept its ‘AA’ rating due to the fact that it was the only examined jurisdiction to have held no outstanding governmental debt. The inquiry from Fitch Ratings Incorporated purportedly additionally determined that the former Portuguese enclave would likely record a budget surplus for 2019 equal to about 9.6% of its gross domestic product despite continuing to experience a ‘mild slowdown’ in revenues from gambling.
Fitch moreover proclaimed that Macau has historically enacted ‘prudent expenditure management’ policies and holds a large reserve of cash that it estimated to be worth around 136% of the city’s gross domestic product for 2018. Nevertheless, the organization purportedly detailed that future growth may be ‘constrained’ due to high levels of volatility in addition to the jurisdiction’s ‘concentration on the gaming sector and tourism from mainland China.’