Financial News: Fitch Lowers China's Rating Outlook On Risks To

Fitch Lowers China's Rating Outlook On Risks To Public Finances

04/10/2024 - 07:19:00 (RTTNews)

(RTTNews) - Fitch Ratings lowered China's rating outlook on Wednesday citing rising risks to public finance amid the economy transforming to a more sustainable growth path from its current property-reliant growth model.

China's sovereign rating outlook was downgraded to 'negative' from 'stable'.

Wide fiscal deficits along with the rising government debt over the past years eroded fiscal buffers from a ratings perspective. Moreover, the fiscal policy is set to play a key role in supporting growth over the coming years, which could lift debt upwards, Fitch said.

In addition, the rating agency also sees a possibility that contingent liability risks may also increase on lower nominal growth.

The credit ratings were affirmed at 'A+' as the economy still possess solid GDP growth prospects relative to peers and play an integral role in global goods trade, robust external finances and also reserve currency status of the yuan.

Fitch forecast general government deficit to widen to 7.1 percent of GDP this year from 5.8 percent in 2023. General government debt is projected to rise to 61.3 percent of GDP in 2024 from 56.1 percent last year.

The second-largest economy is expected to log a moderate 4.5 percent growth this year compared to 5.2 percent in 2023 due to the persistent property sector weakness and the subdued household consumption.

These headwinds were partially offset by the fiscal stimulus with external demand turning mildly supportive.

Regarding price pressures, Fitch said the economy is unlikely to face a prolonged period of deflation, with inflation of 0.7 percent by end-2024 and 1.3 percent by end-2025.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

Hungary's Disinflation Halts In April (26 min(s), 51 sec(s) ago)
(RTTNews) - Hungary's inflation increased for the first time in fifteen months in April, thoug ...Full Story»

Italy Industrial Output Unexpectedly Falls 0.5% (02 hr(s), 54 min(s), 51 sec(s) ago)
(RTTNews) - Italy's industrial production decreased unexpectedly in March, largely due to lowe ...Full Story»

Norway Inflation Slows To 7-Month Low, Producer Prices Fall Further (03 hr(s), 59 min(s), 51 sec(s) ago)
(RTTNews) - Norway's consumer price inflation eased for the fourth straight month in April to ...Full Story»

Japan Eco Watchers Index Falls To 20-Month Low; Signals Bleak Outlook (04 hr(s), 44 min(s), 51 sec(s) ago)
(RTTNews) - A measure of public opinion about the Japanese economy weakened in April to the lowest ...Full Story»

UK Exits Recession As GDP Grows Better Than Expected In Q1 (04 hr(s), 58 min(s), 51 sec(s) ago)
(RTTNews) - The UK economy exited a technical recession in the first quarter with the economic out ...Full Story»

Japan Has Y3.398 Trillion Current Account Surplus (41 min(s), 09 sec(s) ago)
(RTTNews) - Japan posted a current account surplus of 3.398 trillion yen in March, the Ministry of ...Full Story»

Japan Household Spending Slips 1.2% On Year In March (36 min(s), 09 sec(s) ago)
(RTTNews) - The average of household spending in Japan was down 1.2 percent on year in March, the ...Full Story»

New Zealand Manufacturing Index Improves In April - BusinessNZ (52 min(s), 09 sec(s) ago)
(RTTNews) - The manufacturing sector in New Zealand continued to contract in April, albeit at a sl ...Full Story»