BEIJING (Reuters) - Government spending in China rose at its slowest monthly pace in 10 months, though for the whole of 2017 spending is still up slightly from last year in a boon to broad economic activity.
China has pledged a pro-active fiscal policy to support the economy, and analysts have credited Beijing’s pump-priming as one of the key factors underpinning solid growth this year.
In August, spending rose 2.9 percent year-on-year, the Ministry of Finance said on Monday, the smallest rise since October last year, mainly because some spending was front-loaded early in the year.
For the first eight months of the year, spending increased 13.1 percent to 13.16 trillion yuan (1.53 trillion pounds), with the pace of growth still up slightly from last year’s 12.7 percent growth over the same period.
Government revenue increased 7.2 percent in August, slower from July’s 11.1 percent pace, while Jan-Aug revenue rose 9.8 percent to 12.14 trillion yuan. Revenue growth over in the same period last year was 6.0 percent.
China’s economy has defied expectations for a slowdown this year, as a government-led infrastructure drive sparked a boom in construction and underpinned demand and prices for everything from steel to cement to other building products.
Value-added tax revenue rose 19.3 percent year-on-year in August to 390.8 billion yuan, while personal income taxes increased 18.7 percent and revenue from vehicle purchase taxes rose 30.9 percent.
Reporting by Elias Glenn; Editing by Shri Navaratnam