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- China's rising household debt likely to weigh on growth - Fitch
China's rising household debt likely to weigh on growth - Fitch
Chinese households' rising debt servicing costs could weigh on the medium-term economic growth, Fitch Ratings said in a report.
The rating agency noted that household debt had increased rapidly, to 85% of disposable income by the end of 2018. Although debt servicing costs do not pose near-term risks to financial stability, it will weigh on growth prospects in the medium-term.
Fitch estimated that household debt rose to around 53%of GDP last year, driven by mortgage borrowing.
China's household debt-to-disposable income ratio was lower than most developed markets. But the Fitch observed that the gap will narrow rapidly, with the ratio rising to close to 100% at the end of this decade if growth rates remain unchecked.
Earlier the Fitch had raised China's growth outlook to 6.2% this year. However, the projection for 2020 was lowered to 6%.
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