The Fitch ratings agency has lowered its outlook on China’s sovereign credit rating to “negative,” citing risks to public finances amid an economic downturn.
Fitch forecasts that the Chinese government’s deficit could rise to 7.1% of gross domestic product (GDP) this year, up from 5.8% in 2023.
Fitch forecasts that China’s economic growth will slow to 4.5% in 2024 from 5.2% last year. The government in Beijing has set an ambitious goal of 5% GDP growth for this year.
In its downgrade, Fitch stated: “The outlook revision reflects increasing risks to China’s public finances as the country contends with more uncertain economic prospects amid a transition away from property-reliant growth…”
China’s finance ministry said in a written statement that it regretted Fitch’s ratings decision.
Fitch is not the first credit ratings agency to downgrade China. Last December, Moody’s (MCO) downgraded China and warned of the decline in the country’s property sector.
