Fitch Sounds the Alarm: China's Credit Rating Downgraded to 'A' Amid Fiscal Pressures

Fitch Ratings has lowered China's long-term foreign-currency IDR to 'A' from 'A+', citing worries over the deteriorating public finances and fast-growing public debt of the country. In spite of the downgrade, Fitch still has a stable outlook for China, which means that no further adverse changes are imminent.

 

Key Points:

The news reflects China's fiscal predicament, under which policymakers need to balance the support for near-term growth against the need for long-term fiscal consolidation. The stable outlook is that although problems are large, Fitch does not see any further downgrades in the immediate future.

 

Sources: StreetInsider, ING, TradingView