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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