Fitch Retains China's Sovereign Ratings At 'A+'
Fitch Ratings maintained the sovereign ratings of China as the economy logged a remarkable recovery from the downturn posed by the coronavirus pandemic.
The rating agency retained the credit ratings at ‘A+’ with a ‘stable’ outlook.
Fitch said the ratings were underpinned by strong external finances, a track record of strong macroeconomic performance, and size as the world’s second-largest economy.
Nonetheless, the agency cited large structural vulnerabilities in the financial sector, relatively low per capita income, and weaker governance metrics than those of ‘A’ peers as major rating constraints.
Fitch observed that China’s economy is staging a remarkable recovery from the downturn caused by the coronavirus pandemic. According to Fitch, real GDP will grow 2.7 percent this year instead of previously estimated 1.2 percent.
The annual growth is expected to accelerate temporarily to 7.5 percent in 2021 before returning to the trend rate of 5.5 percent in 2022.
On a Fitch consolidated basis, the agency estimated the general government deficit will rise to 11.1 percent of GDP this year, up significantly from 4.9 percent in 2019, though not dissimilar to the scale of fiscal deterioration globally this year.