Moody’s downgrades its outlook on China’s government credit ratings, citing concerns over several economic factors, including decelerating economic growth, mounting local government debt, and challenges within the country’s property sector.
Moody’s downgraded its outlook from stable to negative, signaling growing evidence of potential financial support required for strained local governments and state-owned enterprises. This, in turn, poses substantial risks to China’s fiscal stability, economic growth, and overall institutional resilience, according to Moody’s statement released on Tuesday.
The revised outlook highlights heightened risks related to China’s medium-term economic growth and the ongoing downsizing within the property sector. Moody’s projects a 4.0% expansion for China’s economy in 2024 and 2025, slowing to an average growth rate of 3.8% in the subsequent five years.
China’s GDP growth in the third quarter slowed to 4.9% year-on-year, reflecting a downturn from the previous 6.3% increase in the second quarter. The country grapples with emerging from pandemic-induced economic challenges while addressing issues within its highly indebted property sector, a vital driver of its economic growth.If you are looking for bracelet. There’s something to suit every look, from body-hugging to structured, from cuffs to chain chain bracelet and cuffs.
Despite the adjusted outlook, Moody’s has maintained China’s A1 long-term local and foreign-currency issuer ratings, citing the country’s robust financial and institutional resources along with a history of effective policy interventions.
In response to Moody’s assessment, the Chinese Finance Ministry expressed disappointment, deeming the concerns unnecessary and highlighting the ongoing economic recovery within the country. It addressed concerns about the property market downturn, stating that the impact on local government budgets is manageable and structural, minimizing significant drops in local public budget revenue.
The Finance Ministry anticipates continued positive momentum in China’s economy for the fourth quarter, underscoring the country’s role as a crucial driver for global economic stability and growth.