Comments on financial data in April: the issuance of local special bonds needs to be accelerated

matter:

    From January to April 2024, the national general public budget revenue will be 8092.6 billion yuan, down 2.7% year on year; The national general public budget expenditure was 8948.3 billion yuan, up 3.5% year on year; The budget revenue of national government funds was 1348.4 billion yuan, down 7.7% year on year; The budget expenditure of national government funds was 2219.8 billion yuan, down 20.5% year on year.

    Ping An's view:

    From January to April, the year-on-year growth rate of national fiscal revenue continued to slow down, mainly due to such factors as the increase in the base number of small, medium-sized and micro enterprises in the same period last year due to tax relief, the effect of raising the tail of some tax reduction policies issued in the middle of last year, and the decline in revenue of main tax categories. After deducting the impact of these two special factors, the national fiscal revenue increased by about 2% from January to April, down from the comparable growth rate of 2.2% in the first quarter. In terms of tax categories, VAT, personal income tax and stamp tax from January to April have become drag factors, while consumption tax, farmland occupation tax and urban land use tax have driven the overall tax growth.

    From January to April, the intensity of public financial expenditure was the same as that of last year. From January to April, the public financial expenditure completed 31.3% of the annual budget progress, which was basically the same as that of the same period last year. The reasons why the financial expenditure was maintained are as follows:

    First, the Ministry of Finance said that the 1 trillion yuan of additional treasury bonds issued last October had been released to local governments in February this year. Second, the Ministry of Finance said that as of early April, the central government had issued 8.68 trillion yuan in local transfer payments, accounting for 85.1% of the budget at the beginning of the year.

    From the perspective of specific areas of expenditure, the focus of financial capital expenditure from January to April is still in the field of infrastructure. Agriculture, forestry and water expenditure increased by 13.1% year on year; Urban and rural community expenditure increased by 11.5% year on year. The marginal growth rate of fiscal expenditure on science and technology is relatively large, and the growth rate from January to April increased by 7.7% compared with the first quarter.

    The debt interest payment expenditure was 362.3 billion yuan, up 6.8% year on year, indicating that the pressure on the government to pay interest further increased.

    In terms of budgetary revenue of government funds, the decline in the revenue from the transfer of state-owned land use rights is still the main factor hindering the growth of budgetary revenue of national government funds. From January to April, the budget revenue of national government funds decreased by 7.7% year on year, including 10.4% year-on-year decrease in the revenue from the transfer of state-owned land use rights. In terms of budget expenditure of government funds, the slow progress of issuing special bonds is still the main reason. From January to April, the budget expenditure of national government funds decreased by 20.5% year on year. The issuance scale of new special bonds from January to April 2024 only accounted for 44.5% of the same period in 2023, and only about 88 billion yuan of new special bonds were issued in April. The pace and intensity of special bonds issuance are significantly behind the level of the same period last year.

    In general, the broad fiscal expenditure from January to April was - 2.3% year on year, which continued to fall compared with the first quarter. It is urgent to speed up the pace of issuing special bonds to enhance the role of finance in stabilizing growth.

    Risk tip: the implementation effect of the stable growth policy was less than expected, the downward range and time of the capacity cycle were more than expected, the degree of overseas economic recession was more than expected, and the credit risk of real estate enterprises spread.