China’s fiscal spending surged 25.4 percent in March from a year earlier, accelerating from the first two months of the year as the central and local governments pump money into infrastructure projects to support economic growth. Growth in government spending quickened from 17.4 percent seen in January and February combined, the finance ministry said on Friday.
Central government spending rose 24.3 percent in March from a year earlier, while spending by local governments jumped 25.6 percent, the ministry said in a statement on its website. For the first quarter, fiscal spending rose 21 percent in from a year earlier, it said.
Buoyed by sustained government infrastructure spending and a gravity-defying housing market, China’s economy likely grew by a solid 6.8 percent in the first quarter, the same pace as the previous quarter, due according to a Reuters poll.
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First-quarter GDP data will be reported on Monday. Combined fiscal revenues rose 12.2 percent in March, the ministry said, slowing from 14.9 percent in the first two months. Revenues rose 14.1 percent in the quarter.
The figures were earlier reported by Chinese state media. China has kept its budget deficit at 3 percent of gross domestic product (GDP) for 2017, the same as last year, and pledged to clamp down on risks associated with local government debt.
Moody’s Investors Service said this week that the fiscal stimulus that China’s government is providing to the economy is larger than headline deficit figures suggest. In addition to on-budget spending, China’s government provides support to the economy using off-budget funds, combined with spending and revenue measures by the broader public sector, including state-owned enterprises and government-owned policy banks, Moody’s said.
Moody’s calculates that the direct fiscal impulse that includes transfers in and out of funds was close to 4 percent of GDP over the past two years.