Data released by the Chinese Ministry of Finance showed that in the first half of 2024, fiscal revenue decreased by 2.8% per annum after a similar drop in the first five months of 2024 (through May). Meanwhile, budget spending increased by 2% per annum from January to June, slowing down compared to January-May (+3.4% per annum). Experts said that the fall in fiscal revenue and the increase in budget spending reflected a sharper than expected slowdown in GDP growth in the second quarter, as the downturn in the housing market and weak demand continued to put pressure on the economy. To boost economic growth, China on Monday announced a reduction in key short- and long-term interest rates, which was its first such large-scale step since August last year.
The Ministry of Finance also reported that fiscal revenue fell by 2.6% per annum in June after falling by 3.2% per annum in May. Meanwhile, budget spending decreased by 3% per annum, offsetting the May increase (+2.6% per annum).
Separate data showed that in the first half of 2024, revenue from government land sales fell by 18.3% per annum after a decrease of 14% per annum from January to May. Land sales, a key barometer tracking property sector momentum and local fiscal conditions, have fallen sharply since 2022 amid a prolonged property crisis and sluggish economic growth.