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China fiscal deficit balloons to nearly $1 trillion as economy cools

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Agence France-Presse

<p>BEIJING - China&#x27;s fiscal deficit ballooned to an all-time high of nearly $1 trillion in the first nine months of the year, analysis of government data by Bloomberg showed, as a real estate crisis and tax rebates to boost a cooling economy emptied government coffers.</p><p>The budget shortfall for all levels of government from January to September was 7.16 trillion yuan ($980 billion), according to an analysis based on data released by Beijing&#x27;s Ministry of Finance on Tuesday -- almost three times the 2.6 trillion shortfall over the same period last year.</p><p>Overall government revenue dropped 6.6 percent to 15.3 trillion yuan from January to September as the government dolled out more tax rebates to businesses, according to the finance ministry.</p><p>Fiscal expenditure then rose 6.2 percent to 19.04 trillion yuan in the first nine months, following a government-driven infrastructure push to boost growth and create employment.</p><p>China&#x27;s economy grew 3.9 percent year-on-year in the third quarter, data showed this week, beating expectations.</p><p>But President Xi Jinping&#x27;s re-election to a historic third term as leader of the Communist Party spooked investors Monday, with China&#x27;s currency slumping and stocks in Hong Kong nosediving to their lowest level since the global financial crisis.</p><p>China is also battling an unprecedented crisis in its real estate sector, which makes up more than a quarter of the country&#x27;s GDP when combined with construction.</p><p>In October, second-hand home prices fell by the highest month-on-month rate since 2014.</p><p>&quot;The housing market is still stuck in a downward spiral, global demand is set to cool further, and the weak renminbi is constraining the central bank&#x27;s ability to provide policy support,&quot; Julian Evans-Pritchard from Capital Economics wrote in a research note.</p><p>Consumer demand has also been dampened by sudden lockdowns and strict travel restrictions under Beijing&#x27;s strict zero-Covid policy.</p><p>China is the last of the world&#x27;s major economies still sticking to a zero-Covid strategy.</p><p>&quot;There is no clear sign of a significant easing of the zero-Covid strategy,&quot; Ting Lu, chief China economist at Nomura, said, adding that at least 207 million people were under some form of lockdown across 28 cities in China earlier this week.</p><p>&quot;The actual economic recovery momentum is not strong,&quot; he added.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/10/14/22/china-looks-to-maintain-philippines-supply-chain-gains-as-marcos-jnr-pivots-back-to-us">China looks to maintain Philippines supply chain gains as Marcos Jnr pivots back to US</a></li>	<li><a href="https://news.abs-cbn.com/spotlight/10/24/22/what-to-expect-from-xis-next-5-years-in-power">What to expect from Xi&#x27;s next 5 years in power</a></li></ul><div><strong>RELATED VIDEO</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2310239" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><div> </div>

China's fiscal deficit ballooned to an all-time high of nearly $1 trillion in the first nine months of the year, analysis of government data by Bloomberg showed.