This move underscores concerns over rising debt levels and the impact on broader growth in the world’s second-largest economy
Ratings agency Moody’s downgraded its outlook on China’s government credit ratings to negative from stable, expecting Beijing’s support and possible bailouts for distressed local governments and state-owned enterprises to diminish China’s fiscal, economic and institutional strength.
Moody’s though retained China’s « A1 » long-term rating on the country’s sovereign bonds, while expecting China annual GDP growth to slow to 4% in 2024 and 2025 and average 3.8% from 2026 to 2030.
Structural factors including weak demographics will drive a decline to 3.5% by 2030, it said.
The move underscores concerns over rising debt levels and the impact on broader growth in the world’s second-largest economy as Beijing resorts to fiscal stimulus to support local governments and contain the spiraling debt crisis among the country’s property developers.
« The outlook change also reflects the increased risks related to structurally and persistently lower
medium-term economic growth and the ongoing downsizing of the property sector, » Moody’s said in a statement issued Dec.
