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

Norges Bank Keeps Policy Rate Steady At 4.50% (47 min(s), 45 sec(s) ago)
(RTTNews) - The Norwegian central bank maintained its key interest rate for the third straight dec ...Full Story»

U.S. Service Sector Activity Contracts For First Time Since December 2022 (26 min(s), 45 sec(s) ago)
(RTTNews) - After growing for fifteen consecutive months, U.S. service sector activity unexpectedl ...Full Story»

Eurozone Unemployment Rate Steady At 6.5% For Fifth Month (08 min(s), 45 sec(s) ago)
(RTTNews) - Euro area jobless rate remained unchanged at a record low for the fifth month in a row ...Full Story»

U.S. Services PMI Unexpectedly Indicates Contraction In April (03 min(s), 45 sec(s) ago)
(RTTNews) - After growing for fifteen consecutive months, U.S. service sector activity unexpectedl ...Full Story»

U.S. Job Growth Falls Short Of Estimates In April, Unemployment Rate Ticks Higher (19 min(s), 45 sec(s) ago)
(RTTNews) - After reporting stronger than expected job growth over the past several months, the La ...Full Story»

U.S. Employment Climbs Much Less Than Expected In April (31 min(s), 45 sec(s) ago)
(RTTNews) - After reporting stronger than expected job growth over the past several months, the La ...Full Story»

Turkey Inflation Rises Further To 17-Month High (06 min(s), 45 sec(s) ago)
(RTTNews) - Turkey's consumer price inflation increased further in April to the highest level ...Full Story»

Italy Jobless Rate Falls To 7.2%, Lowest In Over 15 Years (45 min(s), 45 sec(s) ago)
(RTTNews) - Italy's unemployment rate decreased to the lowest level in more than fifteen years ...Full Story»