(Reuters) -Ratings agency S&P Global on Thursday affirmed China’s long-term credit rating at A+ and said its strong fiscal stimulus will keep economic growth resilient amid headwinds from the property sector and tariff pressures.
S&P said the outlook on China’s rating is “stable.”
“The stable outlook on the long-term sovereign credit rating reflects our view that China will return to self-sustaining economic growth of 4% or more annually over the next one to two years,” S&P said in a statement.
“This will allow the government to gradually reduce policy support for the economy over the next several years.”
S&P said it could lower China’s rating if it expects the government to pursue larger fiscal stimulus over the next three to five years, but may raise the rating if fiscal consolidation proceeds faster than anticipated.
S&P also affirmed China’s “A-1” short-term foreign and local currency sovereign credit rating.
China’s finance ministry said on Thursday it was glad to see S&P had reaffirmed China’s sovereign credit ratings, and pledged to “dynamically” adjust policy reserves and strive to achieve the annual growth target.
In April, Fitch downgraded China’s sovereign credit rating, citing rapidly rising government debt and risks to public finances, as policymakers gear up to shield the economy from rising U.S. tariffs.
The world’s No.2 economy grew at a slightly faster pace than expected in the second quarter. But July economic data so far have been mixed, with manufacturing activity shrinking for a fourth straight month even as exports posted an unexpected surge.
(Reporting by Shubham Kalia in Bengaluru and Kevin Yao in Beijing; Editing by David Holmes)
