Moody’s Ratings Agency downgraded its outlook on the Chinese government’s credit rating from stable to negative, citing slowing economic growth in the medium-term and the continued shrinking real estate sector.
Moody’s affirmed China’s ratings for long-term domestic and foreign currency exports at A1 and said it expected the country’s annual GDP growth to reach 4.0% in 2024 and 2025, according to “Reuters.”
“The change in negative outlook reflects growing evidence that authorities will have to provide financial support to heavily indebted local governments and government companies, posing widespread risks to China’s financial, economic, and institutional strength,” Moody’s said in a statement.
The world’s second-largest economy is struggling for a strong post-COVID-19 recovery this year as a worsening real estate market crisis, local government debt risks, slowing global growth, and geopolitical tensions weaken momentum.
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