Consumption Market Slump... Impact of Export Decline and Poor Performance
China's fiscal deficit has continued this year, with a sharp increase in debt and interest expenses. This is attributed to the stagnant consumer market even after the easing of quarantine measures, as well as sluggish overseas trade due to a decline in exports.
According to the announcement by the Chinese Ministry of Finance on the 18th, public budget revenue from January to February this year was 4.5642 trillion yuan (approximately 867 trillion won), a 1.2% decrease compared to the same period last year. On the other hand, expenditures increased by 7% to 4.0898 trillion yuan (approximately 777 trillion won).
Among revenue items, the largest portion from consumption tax revenue amounted to 356.8 billion yuan (approximately 67.8 trillion won), down 18.4% from last year. Value-added tax and tariffs on imports and exports also decreased by 21.6% and 27%, respectively.
Among expenditures, interest payments on debt were the largest at 124.7 billion yuan (approximately 23.7 trillion won), a sharp increase of 27.3% compared to last year. The fiscal situation worsened as debt increased due to financial difficulties, leading to higher interest expenses.
Following the stock market downturn, securities transaction tax plummeted by 61.7% compared to the previous year. Real estate-related tax revenues, including real estate transaction tax (-4%), land value-added tax (-22.4%), and property tax (-2.9%), also continued to decline amid the prolonged slump in the real estate sector.
Fiscal revenue totaled 28.16 trillion yuan (approximately 5351 trillion won), down 6.3% year-on-year, while fiscal expenditure reached 37.12 trillion yuan (approximately 7054 trillion won), up 3.1% from the previous year. This reflects the economic downturn caused by the spread of COVID-19 and strict quarantine controls, as well as the massive budget spent on epidemic prevention.
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