China’s Fiscal Revenue Growth Slows Amid Economic Uncertainty
China’s Fiscal Revenue Growth
China’s fiscal revenue growth slowed down in the first nine months of the year, according to official data. The growth rate decelerated from 10% in January-August to 8.9% during this period. This slowdown reflects the shaky ground on which China’s economic recovery currently stands.
Fiscal Revenue and Expenditure
During January-September, fiscal revenue reached 16.67 trillion yuan ($2.28 trillion), while fiscal expenditure rose by 3.9% to 19.79 trillion yuan. In September alone, fiscal revenue fell by 1.3% year-on-year, compared to a 4.6% fall in August. Fiscal spending also cooled down, with a rise of 5.2% in September, down from a 7.2% increase in August.
Economic Recovery and Weak Spots
China’s economy experienced faster-than-expected growth in the third quarter, thanks to recent policy support. September’s activity indicators also showed positive surprises. However, economists warn that there are still significant weak spots, particularly in the property market, which remains in a deep contraction.
Growth Target and Economic Forecasts
The National Bureau of Statistics stated that China could achieve its full-year growth target of around 5% if the fourth quarter’s gross domestic product (GDP) growth exceeds 4.4%. Various brokerages, including JP Morgan and Nomura, have raised their forecasts for China’s economic growth in 2023.
Recommendations for Budget Deficit
Government advisers suggest that China should lift its 2024 budget deficit target beyond the current 3% of GDP. This would allow Beijing to issue more bonds and revive the economy. Policy insiders and economists believe that this measure can have a positive impact on China’s economic recovery.
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