THE country’s ratio of outstanding liabilities to gross domestic product fell in 2018 after rising in previous years, a sign of initial success in the government’s deleveraging drive, a vice governor of the central bank said Tuesday.

The country’s macro leverage ratio dropped 1.5 percentage points last year, Chen Yulu, vice governor at the People’s Bank of China, told reporters.

The central bank said previously that China’s overall leverage ratio would continue to stabilize due to the government’s supply-side reforms, tighter regulations and a prudent and neutral monetary policy.

The macro leverage ratio hit 250.3 percent in 2017.

China’s liabilities had soared during previous years, with the macro leverage ratio up 13.5 percentage points each year from 2012 to 2016.

“We are currently carrying out structural deleveraging, in the hope that the leverage ratio of companies, especially State-owned enterprises, and local governments, can be reduced as soon as possible,” Chen said.

“Structural deleveraging and stable growth are not completely on opposite ends. For example, the ultimate goal of structural deleveraging is to stabilize the financial sector, and only in that way can the entire economy be stable.”

(SD-Agencies)