Official data revealed that China’s fiscal revenue experienced a 2.8% drop in the first five months of 2024 compared to the previous year, a faster decline than the 2.7% decrease observed in the January-April period. This decline is attributed to weak demand hindering the economic recovery.
Meanwhile, fiscal expenditure increased by 3.4% in the first five months, slightly lower than the 3.5% growth recorded in the initial four months, as reported by the finance ministry data.
In May, fiscal revenue decreased by 3.2% year-on-year, while fiscal spending saw a 2.6% rise. This is a slight improvement from the 3.7% decline and 6.1% rise in April, respectively, according to Reuters.
In response to the economic challenges, China has committed to implementing stronger fiscal stimulus measures to support its fragile economy. The country aims to achieve a growth target of approximately 5% this year, amidst escalating trade tensions with Western countries.
Initiatives such as the issuance of 1 trillion yuan ($137.82 billion) in long-dated special treasury bonds and government-subsidised incentives for trade-ins of automobiles and other consumer goods have been introduced to bolster domestic activity.
Nevertheless, concerns persist over the sustained weakness in domestic demand highlighted by deteriorating property investment, sales, and key financial indicators reaching unprecedented lows.
