S&P Global Ratings has reaffirmed China’s long-term sovereign credit ratings at ‘A+’ and short-term sovereign credit ratings at ‘A-1’. According to a statement released this Thursday, 27th, the long-term rating outlook remains stable, reflecting expectations that the Chinese economy will resume self-sustained annual growth of 4% in the next one or two years.
The rating agency says it could cut the ratings if the Chinese government continues to offer strong fiscal stimulus over the next three to five years.
The ratings could also be downgraded if “contingent liabilities that crystallize on local government balance sheets significantly exceed” S&P expectations, “driving general government net debt to and beyond 80% of GDP.”
On the other hand, S&P says it could upgrade China’s ratings if fiscal consolidation occurs at a faster pace than expected.
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