China's Shaky Recovery: Fiscal Revenue Down 2.7% This Year

In a further sign of China’s uneven recovery, fiscal revenue fell by 2.7% in the first four months of 2024 from the previous year.

The first quarter, from January to March, saw a 2.3% drop, including a 2.4% decline in March, and that expanded to a 3.7 fall in April.

Fiscal expenditure rose 3.5% in the first four months, versus a 2.9% gain in the first quarter, according to finance ministry data released on Monday.

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Fiscal spending in April was up 6.1%, compared with March’s 2.9% fall, according to Reuters’ calculations based on the ministry data.

Excluding factors such as last year’s high base and tax cut policies, fiscal revenue in the first four months grew 2%, the ministry said in a statement.

China has set an ambitious economic growth target of around 5% for this year, which many analysts say will be a challenge to meet as prolonged weakness in the property sector and tepid consumer demand remain a drag on the economy.

Factory output topped forecasts in April, helped by improving external demand, but retail sales unexpectedly slowed and the property sector remained a key drag on the economy, piling pressure on Beijing to do more to support growth.

The expansion of outstanding total social financing (TSF), a broad measure of credit and liquidity, hit a record low of 8.3% in April, amid lagging government bond issuance.

On Friday, China unveiled “historic” property easing measures and the finance ministry kicked off the issuance of 1 trillion yuan in long-dated special treasury bonds to stimulate key sectors of the economy.