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China Fiscal Revenue Slows as Big Banks Cut Growth Forecasts

China’s fiscal revenue grew at a slower pace in July, data released on Monday showed, as major banks continue to cut growth forecasts for the world’s second largest economy

Morgan Stanley is one of a many global financial institutions that have reduced their growth forecasts for China this year.
Morgan Stanley is one of a many global financial institutions that have reduced their growth forecasts for China this year. This file image from July 2018 shows a sign on the bank's building in New York (Reuters).


China’s fiscal revenues grew 11.5% in the first seven months of 2023 from a year earlier, finance ministry data showed on Monday.

That figure indicates that growth is slowing, as it was down nearly 2% from a 13.3% rise in the first six months.

Fiscal spending rose 3.3% in the January-July period, down from a rise of 3.9% in the first six months, the ministry added.


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The news comes after five major brokerages cut their economic growth forecasts for China this year as worries about contagion from debt repayment troubles at its top private property developer Country Garden deepened.

China’s economic growth outlook has soured with retail sales, industrial output and investment all growing at a slower-than-expected pace.

Weak consumer demand has tipped the world’s second largest economy into deflation amid rising pressure on Beijing to deliver more stimulus to support the economy.


Global banks chop China growth forecasts

Global banks have cut their forecasts in light of growing fear that massive debts accrued by provincial governments funding bodies is limiting financial policymakers’ capacity to maintain the economic recovery seen in the first quarter after tough Covid restrictions were finally lifted late last year.

Weak global demand saw exports plunge by 14.5% in July and that dismal trade data amplified fears that China is transitioning to a new era of much slower growth.

Last week Morgan Stanley slashed its 2023 forecast from 5% to 4.7%, while JPMorgan trimmed its 5% forecast to 4.8% and Barclays chopped its estimate from 4.9% to 4.5%.

Deutsche Bank also trimmed its China outlook from 5.3% to 5%, while Nomura cut its forecast from 5.1% to 4.6%.


  • Reuters with additional editing by Jim Pollard




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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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