China’s Fiscal Revenues Drop 14.5% YoY for January-April Period

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Official figures point to a sharp decline in China’s fiscal revenues since the start of 2020 as a result of the economic impacts of the COVID-19 pandemic.

Figures released by the Ministry of Finance (MOF) on 18 May indicate that during the period from January – April 2020 China’s national general public budget revenues were 6.2133 trillion yuan (approx. USD$880 billion), for a YoY decline of 14.5%.

Central government general public budget revenues were 2.8522 trillion yuan, for a YoY decline of 17.7%, while local government general public budget revenues were 3.3611 trillion yuan, for a YoY decline of 11.5%.

National tax revenues were 5.3081 trillion yuan for the period, for a YoY decline of 16.7%, while non-tax revenues were 905.2 billion yuan, for a YoY rise of 1%.

During the period from January – April national general public budget expenditures totalled 7.3596 trillion yuan, for a YoY decline of 2.7%.

Central government general public budget expenditures were 1.0315 trillion yuan, for a YoY rise of 0.1%, while local government general public budget expenditures were 6.3281 trillion yuan, for a YoY decline of 3.2%.

On 27 March a meet­ing of the Chi­nese Polit­buro made ref­er­ence to the need for “ap­pro­pri­ate in­creases in the fis­cal deficit,” while the cur­rent fi­nance min­is­ter has also sim­i­larly flagged a rise in debt lev­els. 

Domestic analysts expect China’s deficit-to-GDP ratio to breach the 3% threshold in 2020 as a result of the COVID-19 pandemic, while ex-finance minister Lou Jiwei recently called for an increase to 5.8%.

The prospect of a sizeable increase in deficit levels has triggered heated public debate in policymaking circles over whether or not China should monetise its fiscal deficit via money printing.

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