China’s Finance Ministry denounced a report by Fitch Ratings that kept its sovereign debt rated at A+ but downgraded its outlook to negative, saying Wednesday that China’s deficit is at a moderate and reasonable level and risks are under control.
The Finance Ministry said it was a “pity” that Fitch had downgraded its sovereign debt and faulted its methods, saying it had failed to take into account Beijing’s moves toward “appropriately intensifying, improving quality and efficiency” of its government spending. Fitch’s report noted that China’s general government deficit was forecast to rise this year to 7.1 per cent of its GDP, up from 5.8 per cent in 2023. The median for countries with an “A” rating is 3.0 per cent, it said. China’s average deficit to GDP ratio averaged 3.1 per cent in 2015-2019 but jumped to 8.6 per cent in 2020, during the COVID-19 pandemic.