The Limited Times

Now you can see non-English news...

Moody's downgrades China's rating outlook to negative due to debt

2023-12-05T09:09:02.621Z

Highlights: Moody's downgrades China's rating outlook to negative due to debt. Real estate has long accounted for a quarter of China's gross domestic product (GDP) and supports thousands of low-skilled businesses and employees. In the wake of the report, China's Ministry of Finance said it was "disappointed" by Moody's decision. The real estate crisis is a major impediment to economic recovery. It weighs on the country's ability to meet its growth target for 2023, set by the government at "around 5%.


Real estate has long accounted for a quarter of China's gross domestic product (GDP) and supports thousands of low-skilled businesses and employees.


Rating agency Moody's on Tuesday downgraded the outlook for China's rating from "stable" to "negative" due to debt in the world's second-largest economy.

«

The shift to a negative outlook reflects growing evidence that the government and the public sector will provide financial support to regional governments and distressed state-owned enterprises (SOEs), posing broad risks to fiscal soundness," Moody's said.

Rating agency Moody's on Tuesday downgraded the outlook for China's rating from "stable" to "negative" due to debt in the world's second-largest economy. "The decision to change the outlook to negative reflects growing evidence that the government and the public sector ... provide financial support to regional governments and state-owned enterprises in financial difficulty," Moody's said.

This "poses vast risks ... for China's fiscal strength," Moody's said in a statement, due to "weaker" economic growth in the Asian giant and difficulties in the real estate sector. In the wake of the report, China's Ministry of Finance said it was "disappointed" by Moody's decision.

Read alsoCasino has not paid interest on its debt, says Moody's

The sector has experienced meteoric growth over the past two decades, but the financial setbacks of emblematic real estate groups (Evergrande, Country Garden, etc.) are now fuelling buyers' mistrust, against a backdrop of unfinished housing and falling prices per square metre. To revive real estate and stimulate activity, the government has stepped up measures to support the sector in recent months. But the results are inconclusive. The real estate crisis is a major impediment to economic recovery.

It weighs on the country's ability to meet its growth target for 2023, set by the government at "around 5%".

Source: lefigaro

All business articles on 2023-12-05

You may like

Life/Entertain 2023-11-10T22:31:30.883Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.