Experts: Local govt debt may see growth

Despite efforts to curb the growth of local government debt, bond financing is likely to set a record next year, analysts said, as infrastructure spending is unlikely to fall and more bonds will be rolled over to reduce interest payment pressure.

In addition, a trial program that allows provincial-level governments to issue and repay bonds on their own is likely to expand next year, creating more demand for the bond market.

However, most credit rating analysts said that risks would decline overall as the freewheeling, opaque local government debt market is replaced by a more regulated municipal bond market.