Chinese fiscal revenue growth raced ahead in the first half of the year from that in the first five months, China’s Finance ministry said on Thursday.
Fiscal revenues in January to June rose 3.3% from a year ago, excluding the impact of value-added tax (VAT) credit rebates, faster than a 2.9% rise during the January-May period, Xue Xiaoqian, an official at the Finance ministry, said.
Fiscal revenue in the month of June alone grew 5.3% from a year earlier after adjusting for VAT credit rebates.
Xue said China’s fiscal revenues were expected to steadily rebound in the second half of this year as the economy improves.
Revenues from government land sales shrank 40% in June alone, according to calculations based on official data, widening from a 24% slump in May amid a property market downturn.
VAT Credit Rebates Boost Coffers
Fiscal revenues totalled 10.52 trillion yuan ($1.56 trillion) in the first half, in addition to 1.84 trillion yuan of VAT credit rebates. Fiscal spending reached 12.89 trillion yuan in the first half, up 5.9% from a year earlier.
China has unveiled a raft of economic support measures in recent months, including issuing local government special bonds for infrastructure projects more quickly, to help revive an economy hurt by extensive Covid lockdowns that began in late March.
Chinese local governments issued a net 3.41 trillion yuan of special bonds by end of June, a second ministry official, Song Qichao, said at the same press conference, part of a 2022 special bond quota of 3.65 trillion yuan.
Sources have said that China will issue a 2023 advance quota for local government special bonds in the fourth quarter, with the new quota likely bigger than the 1.46 trillion yuan announced a year earlier.
Data due on Friday is expected to show further signs of a modest economic improvement, with industrial output expected to pick up and retail sales to level off after months of contraction.
- Reuters with additional editing by Jim Pollard