Source: S&P Global Ratings
On Friday, global credit watcher S&P Global Ratings n Friday affirmed its credit ratings on China, citing the country’s reform agenda and growth prospects.
- S&P affirmed its ‘A+’ long-term rating on China with a stable outlook, and the short-term sovereign credit rating at ‘A-1.’
- The credit watcher believes China will maintain above-average GDP growth in the next two to three years.
- S&P expects China’s real GDP growth to hit 8.3% in 2021 owing to the vaccination program against COVID-19 and the continued efforts to avoid new outbreaks.
- Growth will moderate to 5.1% in 2022, 5.0% in 2023, and 4.8% in 2024.
- The 10-year average growth is expected at 5.2%, above the average of its peers.
- Fiscal performance is likely to improve as China ‘cautiously’ dials back its policy support for the economy.
- Ratings may be raised if China maintains measures to prevent unsustainable credit growth and off-budget borrowings.
- Downside risks include higher credit growth to support recovery and weaker fiscal performance, which could result in higher government debt.