BEIJING: China’s fiscal spending jumped 19.1% in June from a year earlier, quickening sharply from a 9.2% rise in May and signalling government efforts to cushion a gradual slowdown in the world’s second-largest economy.
Central government spending rose 10.2% in June from a year earlier while local government spending soared 20.3%, the finance ministry said on Friday.
The pick-up in fiscal spending was mainly due to faster funding allocation to guarantee the key expenditure needs under a drive to make fiscal policy more ”active and effective” this year, the ministry said in a statement on its website.
Government spending in the first six months of the year rose 15.8% from a year earlier, the ministry said.
China’s economic growth is expected to have cooled to 6.8% in the second quarter as Beijing tightens the screws on financial risks, a Reuters poll showed, in a sign the world’s second-biggest economy is set for a further slowdown over the coming quarters.
Government-led stimulus has been a major driver of economic growth over the past years, but the pump-priming has also been accompanied by runaway credit growth and has created a mountain of debt.
China has kept its budget deficit at 3% of gross domestic product (GDP) for 2017, the same as last year, and pledged to clamp down on risks associated with local government debt.
China’s fiscal revenues increased 8.9% in June from a year earlier, also quickening from May’s 3.7% rise, the ministry said.
Fiscal revenue in the first half rose 9.8% from a year earlier.
Faster fiscal revenues reflected China’s steady economic growth, rising producer prices and improving corporate profits, the ministry said. - Reuters
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