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UPDATE 1-China June fiscal spending growth quickens to 19.1 pct y/y
July 14, 2017 / 5:17 AM / 4 months ago

UPDATE 1-China June fiscal spending growth quickens to 19.1 pct y/y

* June fiscal spending up 19.1 pct y/y, revenue up 8.9 pct

* Adds to signs of steadying economic growth

* Jan-June spending up 15.8 pct, revenue up 9.8 pct (Adds details)

BEIJING, July 14 (Reuters) - China’s fiscal spending jumped 19.1 percent in June from a year earlier, quickening sharply from a 9.2 percent rise in May and signaling government efforts to cushion a gradual slowdown in the world’s second-largest economy.

Central government spending rose 10.2 percent in June from a year earlier while local government spending soared 20.3 percent, the finance ministry said on Friday.

The pick-up in fiscal spending was mainly due to faster funding allocation to guarantee the key expenditure needs under a drive to make fiscal policy more “active and effective” this year, the ministry said in a statement on its website.

Government spending in the first six months of the year rose 15.8 percent from a year earlier, the ministry said.

China’s economic growth is expected to have cooled to 6.8 percent in the second quarter as Beijing tightens the screws on financial risks, a Reuters poll showed, in a sign the world’s second-biggest economy is set for a further slowdown over the coming quarters.

Government-led stimulus has been a major driver of economic growth over the past years, but the pump-priming has also been accompanied by runaway credit growth and has created a mountain of debt.

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.

China’s fiscal revenues increased 8.9 percent in June from a year earlier, also quickening from May’s 3.7 percent rise, the ministry said.

Fiscal revenue in the first half rose 9.8 percent from a year earlier.

Faster fiscal revenues reflected China’s steady economic growth, rising producer prices and improving corporate profits, the ministry said.

Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Shri Navaratnam and Sam Holmes

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