Macro data tracking: China's finance series I: spending is stronger than revenue, and finance continues to grow steadily

Macro Events

    On May 20, 2024 (Beijing Time), the Ministry of Finance announced the fiscal revenue and expenditure from January to April 2024. Including:

    General public budget revenue was - 2.7% year on year (VAT - 7.6%, individual income tax - 7%, stamp tax - 52.7%; consumption tax+8.3%, corporate income tax+0.9%, export tax rebate+18.8%); General public budget expenditure is+3.5% year on year (social security and employment+3.8%; education+3.1%). The budget revenue of government funds was - 7.7% year on year (central - 11.1%, local - 9.3%); The budget expenditure of government funds was - 20.5% year on year (central+33.8%, local - 21.2%).

    Core viewpoints

    General public budget

    General public budget revenue: In April, the general public budget revenue made a progress of 36.1%, 0.9 percentage points lower than the average over the same period of the past five years, which shows that the pressure of nominal growth of the real economy continues to drag on fiscal revenue. In April, the year-on-year growth rate of CPI slightly improved to 0.3%, and the low inflation characteristics are still obvious. From the perspective of income structure, the growth rate of income such as value-added tax and corporate income tax related to economic growth in April was still low, and from the perspective of growth change, the growth rate of most taxes in April continued to decline compared with that in March. Among them, the year-on-year growth rate of stamp tax on securities transactions slowed significantly to -52.7%, reflecting the impact of the policy of "halving the stamp tax on securities transactions" in August last year.

    General public budget expenditure: In April, the progress of general public budget expenditure was 31.3%, 0.5 percentage point higher than the average of the same period in the past five years, which was stronger than the income. 430 At the meeting of the Political Bureau, the "positive fiscal policy" continued to be mentioned, and pointed out that we should rely on forward efforts to effectively implement the identified macro policies and maintain the necessary intensity of fiscal expenditure. In April, the central government has issued a transfer payment target of more than 8 trillion yuan to local governments, and the use of the additional 1 trillion yuan of treasury bonds issued at the end of last year has accelerated, driving the high growth of expenditure. From the perspective of the specific expenditure structure, the relatively strong financial expenditure is mainly reflected in the agricultural, forestry and water affairs expenditure (+12.7%), urban and rural community affairs expenditure (+11.5%) and other fields, and continues to maintain a high double-digit growth rate.

    Government fund budget

    Budget revenue of government funds: In April, the budget revenue of government funds made a progress of 19.0%, 2.8 percentage points lower than the average of the same period in the past five years, and the difference has been further expanding since the beginning of the year, indicating that the local government is in a tight financial situation. From the perspective of structure, although the growth rate of the revenue from the transfer of state-owned land use rights further slowed down to - 10.4% in April, with the further loosening of the national real estate policy in May, it is expected that the improvement of future real estate sales will gradually be transmitted to the land market, and the time will be prolonged, and the local government's second account will be improved marginally.

    Risk

    Risk of short-term fluctuation of economic data and risk of rapid rise of upstream prices