China’s debt ratio continued decline in first quarter as economy rebounded from coronavirus pandemic
- China’s total debt ratio fell 2.6 percentage points to 276.8 per cent of GDP in the first quarter after rising amid the pandemic last year
- Central bank says debt ratio reduced without tightening credit conditions, but by greater efficiency of economic support measures
China has begun gradually reducing its debt-to-GDP ratio without compromising support for the nation’s post-pandemic economic recovery, the central bank has said in a new report.
The non-financial leverage ratio stood at 276.8 per cent at the end of March, 2.6 percentage points lower than the end of December, following a fall of 1.6 percentage points in the fourth quarter, the People’s Bank of China (PBOC) said.
“As the impact of the pandemic gradually abates, the stabilisation of economic growth has been matched with that of the debt level, so [we] estimate the macroeconomic leverage ratio will remain basically stable this year,” said the report’s authors Ruan Jianhong, head of the PBOC’s statistics and analysis department, and her colleague Liu Xi.
The nation’s macroeconomic leverage, usually measured as the ratio of debt to gross domestic product (GDP), is one of the most closely watched economic indicators in Beijing.