Chinese government debt is causing concern to Moody’s. The rating
agency has downgraded its outlook on that debt to ‘negative’ from
‘stable’.
The reason is uncertainty over Beijing’s’ capacity to carry out
economic reforms, coupled with rising government debt and falling
foreign currency reserves. Those reserves have shrunk by $762 billion
(702 billion euros) over the last 18 months.
“Without credible and efficient reforms, China’s GDP
growth would slow more markedly as a high debt burden dampens business
investment and demographics turn increasingly unfavorable. Government
debt would increase more sharply than we currently expect,” Moody’s
said.
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Source: Euronews
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