China's debt levels pose stability risk- IMF

Comments from International Monetary Fund (IMF) are crossing the wires via LiveSquawk and theGuardian - 

  • China should put less emphasis on targets for growth.
  • The system’s increasing complexity has sown financial stability risks.
  • Credit growth has outpaced GDP growth, leading to a large credit overhang.
  • The credit-to-GDP ratio is now about 25% above the long-term trend, very high by international standards and consistent with a high probability of financial distress.
  • As a result, corporate debt has reached 165% of GDP, and household debt, while still low, has risen by 15 percentage points of GDP over the past five years and is increasingly linked to asset-price speculation. The buildup of credit in traditional sectors has gone hand-in-hand with a slowdown in productivity growth and pressures on asset quality.
  • China should form a financial stability sub-committee. 
  • China's regulators should reinforce the primacy of financial stability over development goals. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.