Fitch revises outlook on China to ‘Negative’; affirms rating at 'A+'

In its latest economic assessment of the Chinese economy, Fitch Ratings revised China’s outlook to ‘Negative’ while affirming its sovereign credit rating at ‘A+’.

Additional takeaways

Outlook revision reflects increasing risks to China's public finance outlook.

Forecast general government deficit in China to rise to 7.1% of GDP in 2024.

Believes that fiscal policy is increasingly likely to play an important role in supporting growth in coming years.

2024 deficit will be highest since 8.6% of gdp deficit in 2020.

The 2024 deficit will be the highest since the 8.6% of GDP deficit in 2020.

Forecasts GDP growth to moderate to 4.5% in 2024, from 5.2% in 2023.

Do not forecast a prolonged period of deflation, with inflation of 0.7% by end-2024 and 1.3% by end-2025.