adplus-dvertising
Connect with us

Economy

Moody’s cuts China credit outlook to negative, cites slowing economic growth, property crisis

Published

10 months ago

 on

HONG KONG (AP) — Credit rating agency Moody’s cut its outlook for Chinese sovereign bonds to negative on Tuesday, citing risks from a slowing economy and a crisis in its property sector.

Moody’s said the downgrade, its first for China since 2017, reflects risks from financing troubles of local and regional governments and state-owned enterprises.

The world’s second-biggest economy had been slowing before a 2020 crackdown on excessive borrowing brought on defaults by dozens of property developers. Those troubles have crimped local government finances and also imperiled some lenders, further dragging on the economy.

The need for government intervention to support banks and local governments poses “broad downside risks to China’s fiscal, economic and institutional strength. The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth,” Moody’s said in a statement.

China’s Ministry of Finance said it was “disappointed” with Moody’s decision to lower the outlook.

“Since the beginning of this year, in the face of the complex and harsh international situations, and against the background of an unstable global economic recovery and weakening momentum, China’s macro economy has continued to recover and has been advancing steadily,” the ministry said, according to an online transcript of remarks at a Q&A session Tuesday.

Shares retreated in China on Tuesday, with Hong Kong’s Hang Seng dropping 1.9% and the Shanghai Composite index down 1.7%.

Separately, Moody’s affirmed China’s A1 long-term local and foreign-currency issuer ratings.

The credit rating firm said it expects China’s economy to grow at a 4% annual pace in 2024 and 2025, slowing to an average of 3.8% for the rest of the decade.

Factors such as “weaker demographics,” as the country ages, will likely drive a decline in potential growth to around 3.5% by 2030, Moody’s said.

To offset the weaker property sector, China will need “substantial and coordinated reforms” to support more consumer spending and higher value-added manufacturing to support strong growth, Moody’s said.

China’s recovery from the COVID-19 pandemic faltered after an initial burst of activity earlier in the year faded faster than expected. Despite prolonged weakness in consumer spending and exports, the economy is expected to grow at about a 5% annual pace this year.

China’s economy still has “huge development resilience and potential” and will remain an important engine for global economic growth in the future, the Finance Ministry said.

Zen Soo, The Associated Press

 

728x90x4

Source link

Related Topics:
Continue Reading

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

3 days ago

 on

October 11, 2024

By

 

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Economy adds 47,000 jobs in September, unemployment rate falls to 6.5 per cent

Published

3 days ago

 on

October 11, 2024

By

 

OTTAWA – The economy added 47,000 jobs in September, while the unemployment rate declined for the first time since January to 6.5 per cent, Statistics Canada reported on Friday.

The agency says youth and women aged 25 to 54 drove employment gains last month, while full-time employment saw its largest gain since May 2022.

The overall job gains followed four consecutive months of little change, the agency said.

The unemployment rate has been steadily climbing over the past year and a half, hitting 6.6 per cent in August.

Inflation that month was two per cent, the lowest level in more than three years as lower gas prices helped it hit the Bank of Canada’s inflation target.

The central bank has cut its key interest rate three times this year, and is widely expected to keep cutting as inflation has subsided and the broader trend points to a weakening in the labour market.

Despite the job gains in September, the employment rate was lower in the month, reflecting continued growth in Canada’s population.

Statistics Canada said since the employment rate saw its most recent peak at 62.4 per cent in January and February 2023, it’s been following a downward trend as population growth has outpaced employment growth.

On a year-over-year basis, employment was up by 1.5 per cent in September, while the population aged 15 and older in the Labour Force Survey grew 3.6 per cent.

The information, culture and recreation industry saw employment rise 2.6 per cent between August and September, after seven months of little change, Statistics Canada said, with the increase concentrated in Quebec.

The wholesale and retail trade industry saw its first increase since January at 0.8 per cent, while employment in professional, scientific and technical services was up 1.1 per cent.

Average hourly wages among employees rose 4.6 per cent year-over-year to $35.59, a slowdown from the five-per-cent increase in August.

The unemployment rate among Black and South Asian Canadians between 25 and 54 rose year-over-year in September and was significantly higher than the unemployment rate for people who were not racialized and not Indigenous.

Black Canadians in that age group saw their unemployment rate rise to 11 per cent last month while for South Asian Canadians it was 7.3 per cent. For non-racialized, non-Indigenous people, it rose to 4.4 per cent.

This report by The Canadian Press was first published Oct. 11, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

Published

4 days ago

 on

October 10, 2024

By

 

TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending