China struggles to meet annual budget goals
China is currently facing a tough challenge to meet its annual budget objectives, as the People’s Daily newspaper posted on Wednesday, citing Lou Jiwei, the country’s finance minister. The matter is that China is ramping up its spending to offset a broad economic slowdown.
Chinese fiscal expenditures grew 13.6% during the first five months of 2016, far outstripping the 8.3% surge in fiscal profits. Expenditures in May edged up 17.6% from a year earlier.
From current conditions, it's getting harder and harder to remain an optimist regarding national fiscal profits going up. Meeting full-year budget objectives will require a great deal of hard work.
This year, Beijing has promised to ramp up fiscal support, widening the fiscal deficit to about 3% of GDP, from just 2.3% in 2015, right after economic growth in 2015 cooled to a 25-year minimum. Fiscal profits could also be affected by decreasing economic growth as well as tax cuts.
Lou added that the country’s economy was mostly stable within a reasonable range, though downward pressure on it was still substantial.