Moody’s concerns about growth prospects unwarranted, chinese official says

China expressed disappointment at Moody’s credit rating agency’s move to change the expectations of the country’s government credit rating, as China’s economy recorded a sustained and steady recovery with weak global economic recovery momentum.

“Moody’s concerns about China’s growth prospects and fiscal sustainability were unwarranted,” a Chinese financial official told “Xinhua.”.

“This year was the first in China’s economy to recover from the impact of the COVID-19 pandemic; the country has withstood risks and challenges from abroad and downward pressure from multiple factors at home, leading to a 5.2% year-on-year rise in GDP during the first three quarters of this year,” he added.

“Recent projections from several international institutions, including the World Bank, the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD), have all shown that China can meet its growth target of about 5% this year,” the official explained.

Moody’s cuts China’s credit outlook to negative

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.