SHANGHAI (Reuters) – China faces a tough challenge to meet annual budget targets, the official People’s Daily newspaper reported late on Wednesday, citing finance minister Lou Jiwei, as the country ramps up spending to cushion a broader economic slowdown.
China’s fiscal expenditures rose 13.6 percent in the first five months of the year, far outstripping the 8.3 percent rise in fiscal revenue. Expenditures in May soared 17.6 percent from a year earlier.
“From current conditions, it’s hard to be optimistic about national fiscal revenues going forward,” the state-run newspaper cited Lou as saying at an event in Beijing. “Meeting full-year budget targets will require a lot of hard work.”
Beijing has pledged to ramp up fiscal support this year, widening the fiscal deficit to 3 percent of gross domestic product (GDP), from 2.3 percent in 2015, after economic growth last year cooled to a 25-year low. Fiscal revenue could also be hit by slowing economic growth and tax cuts.
Lou added China’s economy was generally stable and within a reasonable range, although downward pressure on it was still relatively large, the newspaper said.
(Reporting by Adam Jourdan in SHANGHAI and Kevin Yao in BEIJING)