Data published by the Chinese Ministry of Finance showed that from January to April, the country's budget revenues fell by 2.7% per annum, accelerating compared to the 1st quarter (-2.3% per annum). Meanwhile, budget expenditures rose by 3.5% per annum after an increase of 2.9% in the first three months of 2024. Excluding factors such as last year's high base and tax cut policies, fiscal revenue in the first four months grew 2%.
The Ministry of Finance also said that budget revenues fell by 3.7% in April after a 2.4% reduction in the previous month, and budget expenditures increased by 6.1%, offsetting the March decline (-2.9%). Meanwhile, the expansion of outstanding total social financing - a broad measure of credit and liquidity- hit a record low of 8.3% in April, amid lagging government bond issuance.
Overall, the latest data has again confirmed the uneven recovery of the Chinese economy, which is under pressure due to the crisis in the real estate sector and sluggish consumer demand.
Last month, the International Monetary Fund left unchanged its forecast for China's 2024 growth to fall to 4.6% from 5.2% in 2023, with a further drop to 4.1% for 2025. But it warned that the lack of a comprehensive restructuring package for the country's troubled property sector could prolong a downturn in domestic demand and worsen China's outlook. According to official data, in the 1st quarter, China's GDP growth accelerated to 5.3% per annum from 5.2% per annum in the 4th quarter. It was the steepest yearly expansion since Q2 of 2023. Economists had expected the economy to expand by 5.0% per annum.