China’s fiscal revenue declines 2.8% in first 5-m

China’s economic recovery is challenged by declining fiscal revenue, which dropped by 2.8 per cent year-on-year in the first five months of 2024. This decline is due to weak domestic demand, posing obstacles to the country’s economic growth.

Despite the revenue decline, fiscal expenditure rose 3.4 per cent in the first five months compared to 3.5 per cent in the first four months. However, this increase wasn’t enough to compensate for the shrinking revenue stream.

The data revealed a sharper decline in fiscal revenue in May, dropping 3.2 per cent year-on-year, compared to April’s 3.7 per cent decrease. Fiscal spending increased by 2.6 per cent in May, a significant drop from the 6.1 per cent growth seen in April.

The Chinese government plans to boost the economy with increased fiscal stimulus. This includes issuing one trillion yuan ($137.82 billion) in special treasury bonds and offering incentives for car trade-ins and consumer goods purchases.

Attribution: Reuters