Breaking news Fitch Revises China's Outlook To Negative, But Affirms A+ Rating Lastminute news

Wide fiscal deficits, rising government debt eroded fiscal buffers from ratings perspective, says rating agency.

Fitch Ratings announced Wednesday that it had revised China's outlook on its long-term foreign-currency issuer default rating to negative from stable, but affirmed its credit rating at A+.

"The outlook revision reflects increasing risks to China's public finance outlook as the country contends with more uncertain economic prospects amid a transition away from property-reliant growth to what the government views as a more sustainable growth model," it said in a statement.

"Wide fiscal deficits and rising government debt in recent years have eroded fiscal buffers from a ratings perspective," it added.

Fitch said, however, that China's A+ rating is supported by its large and diversified economy, solid GDP growth prospects, its integral role in global goods trade, robust external finances, and the reserve currency status of the Chinese yuan.

The rating agency said it expects China's GDP growth to come in at 4.5% in 2024, down from 5.2% in 2023.

This is "due to persistent property sector weakness and subdued household consumption, resulting from negative wealth effects from the property correction and somewhat sluggish income growth," it noted. -
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