China’s Fiscal Revenue Growth Slows, Signaling Broadening Economic Pressure
by Shahnawaz Alam Finance 19 July 2023
The growth rate of China’s fiscal revenue growth was slower during the first six months of the year. According to the data of Wednesday, it signals broadening economic pressures, which fanned expectations of new provocative steps to boost growth.
The world’s second-biggest economy grew at a frail speed in the second quarter. This is because of the weakened demand both nationally and abroad. The policymakers are also facing several different challenges alongside a surge of local government debts and weak confidence in the private sector.
According to the data shown by the finance ministry, there were data of 13.3 percent growth of the Fiscal revenue during the first 6 months of 2023. This is lower compared to the data of the year earlier when they had a 14.9 percent rise during the first five months. According to June’s fiscal revenue rise of 5.6% from a year earlier slows drastically from a 32.7% jump in May.
The cash-strapped developers were cautious about buying lands, showing a strain on the property sector. Also, the GDP of the country expanded by 6.3% in the second quarter from a year earlier. The Fiscal revenue total was 11.9 trillion yuan in the first six months. On the other hand, the spending totaled a massive amount of 13.4 trillion yuan.
According to policy insiders and economists, governments will hasten the insurance of special bonds. This came from Li Dwaei, a ministry official. He also added that the local governments have also issued 2.17 trillion yuan worth of special bonds during the January-June period.
The government wishes to increase funding for infrastructure projects. They have funded the projects with special local government bonds worth 3.65 trillion yuan.
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