On May 20, the Ministry of Finance released the fiscal revenue and expenditure data for April 2024: the cumulative national general public budget revenue from January to April was 8092.6 billion yuan, - 2.7% year-on-year. According to the data released by the Ministry of Finance, after deducting the special factors such as the increase in the base number of small, medium-sized and micro enterprises' tax deferred warehousing in the same period last year, and the tax cut policies issued in the middle of last year, the growth rate could be about 2%. The accumulated expenditure was 8948.3 billion yuan, up 3.5% year on year. From January to April, the cumulative government fund budget was 1348.4 billion yuan, a year-on-year decrease of 7.7%, and the expenditure was 2219.8 billion yuan, a year-on-year decrease of 20.5%.
1、 Overview of revenue and expenditure in April: short-term "depression" of financial revenue. From the overview of the overall fiscal revenue and expenditure in April, the revenue side of the first account and the second account is at the low point year to date, of which the general public budget revenue is mainly affected by the base number of the sharp increase in tax revenue growth at the beginning of last year. The cumulative revenue growth rate from January to April is - 2.7% (the former value is - 2.3%), while the revenue side of government funds is mainly a small drop in land transfer revenue, From January to April, the growth rate of local cumulative land transfer income further dropped to - 10.4% (previous value: - 6.7%). On the expenditure side, due to the adjustment of the policy of turning bonds into bonds at the beginning of the year, the issuance of special bonds was slow, which limited the power of government fund expenditure. Fiscal expenditure mainly relied on the power of one account. The cumulative expenditure growth of general public budget from January to April was 3.5% (previous value: 2.9%). In April, when the seasonal expenditure was low, the intensity of one account expenditure remained 111%, It is higher than the average level of the past five years (106%).
2、 Income side: what factors led to the "depression" of fiscal revenue growth in April? First, in terms of the role of the base, it is mainly the impact of the fluctuation of tax postponement and centralized warehousing of SMEs last year and the tax rebate in 2022. Among them, there is no public data on the scale of tax relief for small and micro enterprises. We can only exclude this base factor based on the amount of tax rebate previously retained. After the exclusion, the growth rate of value-added tax in April 2023 will decrease from 58% to 10.41%. We believe that the high growth rate after stabilizing fluctuations is the impact of tax relief policies.
Judging from the policy and data, this base factor will gradually dissipate after June. Second, in addition to the base factor, the reduction of consumption and personal tax income also reflected the weak recovery of the demand side in April. According to our calculation, after deducting the three factors of deduction policy adjustment last year, the growth rate of individual income tax from January to April still decreased by 4.4% (statistical data is - 7%). The growth of individual tax burden and the decline of consumption growth rate, as well as the characteristics of consumption structure favoring mandatory consumption, reflect the weak recovery of the current economy at the demand side. Third, the continuous reduction of land revenue will drag down the broad fiscal revenue. Given that the current property increment policy focuses on "de stocking", and the driving effect on the investment side needs to be observed, we believe that land revenue will remain under pressure in the near future.
3、 Expenditure side: In terms of stabilizing growth, the acceleration of one account cannot offset the broad fiscal slowdown. The implementation of national debt projects accelerated, and the growth rate of major expenditures of the general public budget at the expenditure end rebounded in April, among which the growth rate related to infrastructure was further improved. However, the issuance progress of special bonds in April was still slow, with the issuance progress of 23.4%, about 700 billion less than the net financing scale in the same period last year. This part of the drag on infrastructure is obviously higher than the 140 billion yuan increase in the total of four items of infrastructure expenditure in one account compared with last year. Therefore, we can see that infrastructure investment (excluding power) in April's economic data increased by 7.78%, a slowdown of 1 percentage point compared with the previous month.
4、 Issuance of government bonds: policy expectations are gradually fulfilled, and follow-up policy strength is expected. In April, the overall progress of government bond issuance reached the bottom of net financing in the year due to the slow pace of special bonds and the large amount of maturities of government bonds. Among them, the net financing amount of local general bonds and special bonds in April was 9.236 billion yuan and 45.694 billion yuan, both at the low point year to date, while the net financing amount of national debt was -98.444 billion yuan due in April. This is also one of the main factors for the short-term fluctuation of social finance data in April. However, with the launch of the issuance of special bonds in May and the acceleration of the subsequent issuance of large-scale special bonds, we expect that the fiscal "depression" in April will soon pass. From the high-frequency data, as of May 13, 2024, the use progress of the new government debt quota throughout the year was 20.6%, 8.5 pct lower than the average value of the past five years, and the remaining unused quota was 7.11 trillion yuan.
Among them, special debt is 3.1 trillion yuan, national debt is 2.6 trillion yuan, special national debt is 1 trillion yuan, and local general debt is about 400 billion yuan. We simply calculate the progress of the smooth issuance of ultra long term special bonds during the bidding period and the smooth issuance of special bonds by the end of October as usual in previous years: it is expected that the issuance of government bonds will gradually increase in volume from May, and the supply peak may be in July September. With the development of subsequent government bonds, it is expected to drive multiple improvements in infrastructure growth, prices and expectations, and fiscal revenue will also rise.
Risk warning
1. Risk of inadequate policy understanding
2. The risk that the fiscal policy is not as expected
3. Risk of economic downturn beyond expectation
4. Risk of deviation of measurement methods and assumptions
