China’s Jan-Aug fiscal revenue growth slows despite policy support

BEIJING (Reuters) – China’s fiscal revenue rose 10% in the Jan-Aug period of 2023, slower than 11.5% growth in Jan-July, official data showed, even as the economy showed signs of stabilisation in the wake of recent policy support measures.

Fiscal revenue totalled 15.18 trillion yuan ($2.09 trillion) for the eight months, while fiscal expenditures grew 3.8% to 17.14 trillion yuan, the finance ministry said in a statement on Friday.

In August alone, fiscal revenue fell 4.6% on year, cooling from a 1.9% gain in July, according to Reuters calculations based on the official data. Meanwhile, fiscal expenditure rose 7.2%, sharply reversing a 0.8% slide in July.

With a raft of measures put in place to arrest a downturn after a fleeting post-pandemic recovery, the world’s second-largest economy is seeing early signs of stabilisation.

Government revenue from state land sales fell for the 20th consecutive month in August, extending declines to 22.2% from a year earlier from a fall of 10.1% in July, according to Reuters calculations based on the ministry’s data.

Consumer prices returned to positive territory in the month, while new yuan loans beat estimates, nearly quadrupling in August from July.

Still, more support is expected – notably for the crisis-hit property sector – as the economy, grappling with weak demand both at home and aboard, remains under pressure to hit Beijing’s annual GDP target of around 5% for this year.

A Reuters poll of economists pointed to further downside risks to China’s growth prospects, as policymakers continue to face an uphill task in reviving the economy.

($1 = 7.2674 renminbi)

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