MCHI - Fitch Revises China's Credit Outlook To Negative Amid Economic Challenges | Benzinga
Amid a complex economic landscape, Fitch Ratings has adjusted its outlook on China’s creditworthiness, signaling caution over the nation’s fiscal health as it grapples with post-pandemic recovery efforts.
What Happened: Fitch Ratings has revised its outlook on China’s sovereign credit rating to negative from stable while affirming an ‘A+’ rating, Reuters reported on Wednesday. The revision reflects concerns regarding China’s public finances amid prevailing economic uncertainties.
The revision by Fitch follows a similar move by Moody’s in December. China is actively attempting to stimulate its economy, which has been sluggish in the aftermath of the COVID-19 pandemic, through various fiscal and monetary initiatives.
“Fitch's outlook revision reflects the more challenging situation in China's public finance regarding the double whammy of decelerating growth and more debt,” said Gary Ng, a senior economist at Natixis in the Asia-Pacific region.
Fitch predicts a substantial rise in China’s government debt, projecting it to reach 61.3% of GDP in 2024, up from 56.1% in 2023 and a significant leap from 38.5% in 2019. The agency also expects the general government deficit to widen to 7.1% of GDP in 2024, an increase from 5.8% in the previous year.
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