China’s Fiscal Revenue Decline Highlights Economic Pressures in 2025
China’s fiscal revenue decreased by 1.6% in early 2025, contrasting with a 1.3% gain in 2024. Expenditure grew by 3.4%. The government has set a record fiscal deficit target of CNY 5.66 trillion to combat US tariffs and aims for a 5% GDP growth this year.
In the first two months of 2025, China’s fiscal revenue declined by 1.6% compared to the same period in 2024, marking a reversal from a previous annual increase of 1.3% in 2024. Concurrently, government expenditure experienced a rise of 3.4%, though this is a slight reduction from the 3.6% increase noted in the previous year.
To mitigate the effects of increasing US tariffs, China has established its fiscal deficit target at approximately CNY 5.66 trillion, equivalent to 4% of its GDP. This represents a record increase from the previously anticipated deficit target of 3% for the upcoming year.
In light of these circumstances, China has committed to implementing a more proactive fiscal policy in 2025. This strategy includes a broader budget deficit aimed at stimulating domestic consumption, aligning with the nation’s objective of achieving a 5% GDP growth target this year.
The recent decline in China’s fiscal revenue highlights the challenges faced by the economy, especially considering the impact of US tariffs. The increase in expenditure alongside a record fiscal deficit target reflects a strategic shift towards stimulating economic growth through domestic consumption. This proactive approach indicates China’s intent to navigate economic pressures while pursuing a stable growth trajectory.
Original Source: www.tradingview.com
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