China’s debt levels have climbed during the coronavirus pandemic, especially in the private sector.
“It’s crucial to look below the headline number and what we see there is growth that is not yet as balanced as we would like to have,” Helge Berger, head of the fund’s China mission, said in an interview with Bloomberg Television Friday. “Growth is still relying heavily on public support, namely in the form of more traditional public infrastructure investment. What is lagging is consumption.”
General government debt is estimated to climb to 92% of GDP, the IMF said, and reach 113% by 2025 under the fund’s baseline scenario. Those augmented fiscal numbers include the debt of local government financing vehicles and other off-budget activity, as well as normal on-balance sheet borrowings.