China's recovery to be patchy: Moody's
by Victor Zhong
Moody's said that the economic recovery from the coronavirus pandemic will be gradual and uneven across Chinese provinces, with continued downside risk underpinning its negative outlook for regional and local governments in 2021.
While fiscal policy will remain supportive of growth, it will be funded by higher debt, which in turn will increase contingent liability risk for regional and local governments, Moody's said in a new report.
Local governments' finances are still facing challenges due to a shrinking tax base and a higher dependence on land transfer income.
The credit rating agency predicted that China's economic growth will slow sharply to 2.2 percent this year and reach 7 percent next year.
The company predicted that the budget debt burden of local governments this year will account for 97 percent of fiscal income, compared to 83 percent last year.
Source: The Standard
https://www.thestandard.com.hk/section- ... y:-Moody's