Moody's Investors Service downgraded China's government credit ratings outlook from stable to negative due to concerns about lower medium-term economic growth and increasing debt.
2
Slower GDP growth predicted
China's annual GDP growth is predicted to be around 4.0% in 2024 and 2025, with an average of 3.8% from 2026 to 2030.
3
Financial support needed
The negative outlook indicates that Chinese authorities may need to provide financial support for debt-ridden local governments and state firms.
4
Local debt increases
Despite policy support measures, local government debt reached 76% of China's economic output in 2022, up from 62.2% in 2019.
5
Policy actions required
In response, the People's Bank of China has made modest interest rate cuts and injected cash into the economy, but Moody's downgrade highlights the need for more effective policy actions.