Fiscal spending jumps as China attempts to bolster economy
Print Edition
CHINA’S fiscal spending jumped around 25 percent year-on-year for the second straight month after the Ministry of Finance urged local governments to spend more to stabilize the economy.
Fiscal expenditure surged 26.1 percent last month from a year earlier to 1.65 trillion yuan (US$267.7 billion), the ministry said in a statement on its official website yesterday, reflecting the accelerated government efforts to bolster the slowing economy.
Government spending rose only 9.6 percent year on year during the first four months and jumped to 24.6 percent in May after the ministry told the local governments to strengthen the management of budget allocation and speed up spending to effectively stabilize the growth, adjust economic structure and improve livelihood.
Expenditure growth was 12.3 percent at the central government level and 28.3 percent at the local governments in June. Beijing disbursed 201.7 billion yuan, while lower-level government spent 1.45 trillion yuan in total.
The ministry said it speeded up the progress of budget execution for key projects.
Total spending on public housing projects expanded the most in the first half to 201.9 billion yuan — 30.2 percent more from a year ago. Rural-urban community projects surged 23.6 percent to 618 billion yuan. Transportation sector jumped 22.1 percent to 440.4 billion yuan. Medical and healthcare increased 18.4 percent during the same period to 490.5 billion yuan.
The economy showed signs of stabilization in recent months as the government introduced a slew of stimulus measures.
However no major stimulus will be put in place, Premier Li Keqiang has said.
But Dariusz Kowalczyk, senior economist at Credit Agricole Corporate and Investment Bank, predicted that June economic data may point to inconsistent economic performance and would maintain the inconclusive debate over whether the ongoing recovery is self-sustaining or requires further targeted stimulus measures.
“China may be out with a flurry of June releases,” he said yesterday. “We expect deep contraction in foreign direct investments, slowdown in money supply, and some pick up in new social financing.”
According to the finance ministry, fiscal revenue rose 8.8 percent in June from a year earlier to 1.3 trillion yuan, showing a higher increase from 7.2 percent in May.
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