Chinese Economy: Due to growing threats to China‘s prospects for public finance, Fitch Ratings changed the outlook for the country’s long-term foreign debt from stable to negative.
Economic Uncertainty and Growth Model Shift
In a statement released by the rating agency on Wednesday, it said that growing economic uncertainty and China’s attempts to change its growth model away from one centred on the real estate sector “have eroded fiscal buffers from a ratings perspective.”
“Fiscal policy is increasingly likely to play an important role in supporting growth in the coming years which could keep debt on a steady upward trend,” it said. “Contingent liability risks may also be rising, as lower nominal growth exacerbates challenges to managing high economy-wide leverage,” it added.
Economic Uncertainty and Growth Model Shift Impact
In a statement released by the rating agency on Wednesday, it said that growing economic uncertainty and China’s attempts to change its growth model away from one centred on the real estate sector “have eroded fiscal buffers from a ratings perspective.”
Whereas Citi and the IMF both upgraded their China projections, Fitch predicted that China’s economic growth would drop to 4.5% in 2024 from 5.2% in the previous year. Together with stronger-than-expected exports and consumer inflation indicators, China’s factory output and retail sales exceeded estimates in January and February, giving Beijing a head start on its aspirations to meet the 5.0% GDP growth target that analysts have dubbed ambitious for 2024.
Indian GDP Growth Projections
According to global rating agency Fitch Ratings last month in March 2024, Indian GDP is expected to grow at the rate of 7.8 percent in 2024 and 7 percent in the next year 2024. Regarding inflation, Fitch believes that by the end of this year the inflation rate may come down to 4 percent. It is worth noting that even before this, while giving this information, the RBI Governor said that every effort is being made to bring down the inflation rate to 100 per cent by the end of 2024.
