China’s Fiscal Revenue Decline

BEIJING (Reuters) – China’s fiscal revenue in the first eight months of 2024 was down 2.6% from a year earlier, unchanged from July’s seven-month reading, finance ministry data showed on Friday. This decline comes as pressure mounts on policymakers for more stimulus to improve the economic outlook.

Fiscal expenditure grew 1.5% in the January-August period, a decrease from the 2.5% increase recorded in the first seven months.

August Data

In August alone, fiscal revenue declined by 2.8% year-on-year, a worsening from the 1.9% decline in July. Fiscal spending also decreased by 6.7%, a significant reversal from the prior month’s 6.6% increase, according to Reuters’ calculations based on ministry data.

Economic Recovery and Growth Target

August’s economic data indicated that momentum in China’s export-led recovery remains weak, with domestic demand struggling amidst a persistent deflation threat. China’s growth target of roughly 5% for 2024 allows for some flexibility; however, recent faltering growth has led several global brokerages to lower their forecasts below this target.

Economists and policy advisers anticipate additional policy support to help meet the growth goals, though a large-scale stimulus is deemed unlikely. Premier Li Qiang has committed to implementing further measures to boost demand, while the central bank has indicated potential for cutting bank reserve requirements to stimulate growth.