Almost by 1 trillion. China’s already -bound fiscal deficit jumped to a record high in the first five months, as spending soared as a result of the pandemic and fiscal stimulus cuts that cut revenue.
The government received a total of 10.9 trillion. yuan ($ 1.6 trillion) in general revenue from government coffers in January-May, but spent much more, $ 13.8 trillion. yuan, during the same period.
The deficit of 2.9 trillion. yuan, which covers budgets for all levels of government, compares with a small surplus last year, which is almost 43% higher than in 2020.
China’s finances have been hit twice as hard in recent months by a resurgence of coronavirus cases, which means it has had to pay more for lockdowns and healthcare, and also increase support for an economy shattered by the same coronavirus controls.
Falling revenues because they need higher spending will force local authorities to either boost their already heavy debt or accept weaker economic growth.
General fiscal revenue shrank 33% in May from a year earlier to 1.24 trillion. yuan, after falling 41% in April.
Source: Capital
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