China's January-August fiscal revenue down 2.6%

China's January-August fiscal revenue down 2.6%

Fiscal expenditure grew 1.5% in the January-August period, down from a 2.5% increase in the first seven months.

In August alone, fiscal revenue went down 2.8% year-on-year, worsening from the 1.9% decline seen in July. Fiscal spending decreased by 6.7%, a sharp reversal from a 6.6% jump in July, according to Reuters’ calculations based on the ministry’s data.

August economic data showed momentum in China’s export-led economic recovery remains frail. Domestic demand struggled to gain traction amid persistent deflationary threat.

China’s roughly 5% growth target for 2024 allows for some flexibility. However, faltering growth in recent months has prompted several global brokerages to lower their forecasts below that target.

© Reuters. FILE PHOTO: An evening view of the financial central district of Hong Kong, China October 3, 2023. REUTERS/Tyrone Siu/File Photo

Policy advisers and economists expect more policy support to at least help the economy meet the growth target, but they said a “bazooka” stimulus is unlikely.

Premier Li Qiang has pledged further measures to boost demand, and the central bank has signalled the room for further cutting bank reserve requirement to stimulate growth.

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