China’s 2023 debt-to-GDP ratio growth set to slow as economy recovers, Economic Daily says
- The macro leverage ratio – or total debt as a percentage of gross domestic product – rose to 273.2 per cent as of the end of 2022, but could rise at a slower pace this year
- The Economic Daily, which is affiliated with the State Council, added that China’s debt ratio is basically stable, and that financial risks are ‘generally under control’
The Chinese economy’s debt ratio is likely to slow this year, according to a top official newspaper, amid growing concerns over the sustainability of rising levels of local government borrowing.
The macro leverage ratio – or total debt as a percentage of gross domestic product (GDP) – rose to 273.2 per cent as of the end of 2022 from 262.8 per cent a year earlier, according to a commentary carried in the Economic Daily on Tuesday. The article cited a report published last week by a government-backed think tank. The newspaper is affiliated with the State Council, China’s cabinet.
The ratio could go up further this year, albeit at a slower pace, the article said. The think tank – the National Institution for Finance and Development (NIFD) – forecast the ratio to rise by 5.5 percentage points this year, or about half of last year’s increase, if economic growth reaches 5.5 per cent.
The commentary came as concerns over local government finances and their ballooning debt are mounting.