China may overtake the US in terms of a GDP-to-debt ratio by 2027. Economists note that China’s national debt can exceed the country’s GDP. European credit rating agency Scope Ratings reported that debt is expected to exceed 100% of GDP by 2027, reflecting a further steepening debt trajectory. In its outlook for the Chinese economy, the agency pointed to the fact that the country’s sovereign debt stood at 34% of GDP, soaring to 60% in 2016. The fiscal stimulus in response to the pandemic raised debt to 77% of GDP in 2022. Scope Ratings projects that the figure may reach 149% in 2027. The outlook considers monetary policy risks and demographic challenges. Notably, the country’s population decreased in 2022 for the first time in more than 60 years. In addition, the real estate sector also threatens the Chinese economy.
