Fiscal cushion to sustain Q2 economic momentum
Substantial growth in China's fiscal revenue during the first four months of this year and the rapidly improving financial climate are expected to give policymakers more leeway to issue policies that can sustain growth momentum in the second quarter, experts said on Tuesday.
The robust growth in fiscal revenues will allow policymakers to fine-tune policies in order to ensure stable growth and withstand unexpected headwinds and risks in the short-term, such as trade frictions and the financial deleveraging campaign, said Wendy Chen, a senior economist with Nomura Securities.
Chen expects the government to speed up fiscal spending in the coming months to maintain the growth momentum.
From January to April, the country's gross fiscal revenue maintained a double-digit growth rate of 12.9 percent year-on-year to reach 6.9 trillion yuan ($1.08 trillion), with tax income accounting for 6.09 trillion yuan of the total, according to data from the Ministry of Finance.
Fiscal revenue stood at 1.85 trillion yuan in April, up 11 percent from a year earlier, while tax revenue rose 14.6 percent to 1.66 trillion yuan, according to the ministry.
Bai Jingming, vice-president of the Chinese Academy of Fiscal Sciences, said the higher tax income was largely due to the steady economic growth momentum.
China's industrial output expanded to 7 percent in April, increasing from the 6-percent rise in the previous month and beating market expectations of around 6.4 percent, official data showed.
During the first four months, industrial output rose 6.9 percent, compared with the 6.8-percent gain in the first quarter, the National Bureau of Statistics (NBS) said in a statement.
"Economic restructuring is gathering pace with the upgrade of traditional industries and the fast expansion of emerging industries. The overall improvements in corporate profits has also contributed to the tax increase," said Bai.
Meanwhile, steady growth in consumer spending has to a large extent buoyed revenue growth with an increase in individual earnings and improved employment prospects. "That could further spur growth in revenue from income tax and consumption tax," Bai added.
The finance ministry reported an 18.4 percent growth in value-added tax in the first four months, 24 percent in consumption tax, 13 percent in corporate income tax and 20.8 percent for individual income tax.
The faster growth in individual income tax, compared with that of the corporate sector, proves the fact that the residential sector has seen faster growth in revenue and has benefited more from economic growth during the past months, according to a research note from Huatai Securities.
Economists predicted that the strong expansion of fiscal income could support sufficient fiscal expenditure in the second quarter as proactive policy measures will continue to prevent negative impacts from economic headwinds.
"We expect Beijing to continue its pledged supplementary lending program to support home purchases in lower-tier cities and boost fiscal spending," said Chen from Nomura.
During the first four months of 2018, China's total fiscal spending reached 6.57 trillion yuan, up by 10.3 percent from a year earlier, slower than the 16.3 percent growth in the same period last year, according to the finance ministry.
In April, fiscal expenditure expanded 8.2 percent year-on-year to 1.47 trillion yuan, the official data showed.
Though China's economy maintained steady development in April, it still faced considerable external uncertainties and problems of unbalanced and inadequate domestic development, NBS spokesperson Liu Aihua was quoted as saying by Xinhua News Agency.
Despite robust industrial output figures, the retail sector, which is key for China's consumption-driven growth, was one area that fell short of expectations with sales growth slowing to 9.4 percent from 10.1 percent in March. The indicator fell below the 10 percent forecast by analysts.
Expansion in fixed-asset investment also sagged to 7 percent year-on-year for the first four months, from the 7.5 percent recorded in the first quarter.
"Looking ahead, domestic spending is likely to continue to soften given the headwinds from slowing credit creation," Julian Evans-Pritchard, an economist at Capital Economics, told AFP.
- 董明珠谈退休：心还像25岁 要让格力一人一套房
- 女孩花7000元定制“挽回前男友” 对方却闪婚
- 美使馆迁往耶城后 巴勒斯坦人迎来2014以来最血腥一天
- 丹东实施限购遏制投机炒房 英媒：炒房热已蔓延至韩国
- 家中起火丈夫不愿独自逃命 为救瘫痪妻双双离世
- GAP衣服被指删减中国地图 官方中国市场产品销毁
- 外媒：中国再度开通赴伊朗班列 展现不对美国让步姿态
- 出海记｜OPPO小米挺进英国 英媒：迎来智能手机新时代}
- 她193万拍到心仪房产却被告知无效 平台称因系统异常
- Alberta courting visitors from China
- 基金布局整装待发 公私募紧盯入摩机会
- 俱乐部排名上港第62压众豪强 恒大重返前100名
- 西媒称中国掀起无人驾驶热潮：前景光明 潜力巨大
- 美将军称美军需要更多低当量核武 威慑俄罗斯
- 这支胶水能修复数据线 省下的钱换个新iPhone
- 解放军本月接收第一个S400导弹团 台军机起飞就可击毁
- 巴萨刻意输球 联赛不败终结
- Fiscal cushion to sustain Q2 economic momentum
- 男子200万雇凶杀人 暗杀被转手5次价码变成10万
- 中美代表激辩世贸组织理事会 中方批美：开历史倒车
- 物联网保驾 告别夺命沙井盖
- 中美代表激辩世贸组织理事会 中方批美：开历史倒车
- 中国如何培养航母舰长 可借鉴美经验选飞行员当舰长
- 职业技能培训 有了“终身”保障
- 普京红场阅兵“秀肌肉” 叙战场武器成最大亮点
- Air China is ranked world's 5th safest airline
- 法媒：索罗斯基金会撤出匈牙利 将迁至德国
- 共建透明健康生态 99公益日规则委员会成立
- 敏感时期东风41亮剑有何玄机 反制美俄加强核武表态
- 鸡蛋、披萨、冰激凌：除了自拍 这些新奇博物馆意义何在？
- 新媒：大陆实弹演习 台舆论高度关注但台当局低调处理
- 《战神4》拍照模式今日推出 移动端表情帖也放出
- Chinese premier stresses brand building
- 家中起火丈夫不愿独自逃命 为救瘫痪妻双双离世