INSUBCONTINENT EXCLUSIVE:
trillion) in January to November, according to Bloomberg calculations based on data from the Ministry of Finance
That was more than double the same period last year and larger than in 2020, when the economy was battered by the initial Covid outbreak and
growth was the slowest in decades.
The worsening deficit underscores just how bad the economy was at the end of November, shortly before
the government in Beijing effectively scrapped its strict policy of trying to contain Covid infections.
The lockdowns, testing and
quarantine rules that were key to the Covid Zero policy put a strain on consumer and business spending, pushing the economy close to
contraction in the second quarter
A surge in infections this quarter has already caused a drop in retail sales in October and November.
The Covid policy was also
increasingly expensive to maintain
Local governments had to bear huge costs to test and quarantine residents, while their income from land sales and taxes plummeted amid a
slump in the housing market.
With Covid infections now sweeping across the country, local governments are unlikely to see an immediate
improvement in tax revenue and finances
Healthcare spending is likely to jump as more people fall sick, even if spending on testing and quarantines fall
subdued.
Consumers in some cities are avoiding crowded places, and labor shortages and factory disruptions are expected to increase in
coming months as infections spread
Car sales, a rare bright spot for consumption this year, declined for the first time in six months in November, while the fall in home
purchases deepened even though local authorities further eased curbs on buying.Spending Up, Revenue Down
Total income from the general
public and government fund budgets was 18.6 trillion yuan in the first 11 months of this year
That was down 3% from a year earlier, a slowdown from the 4.5% drop in the first 10 months
It would have risen 6.1% had it not been for tax rebates the government mostly handed out earlier in the year, according to the finance
ministry.
Governments across the country made 715 billion yuan from selling land in November, compared with the 552 billion yuan earned in
the previous month but down about 13% from a year earlier
wrote in a report after the data was released.
Revenue from deed taxes slid 23.8% in the first 11 months of the year from the same period
in 2021.
Total government spending in the first 11 months was 22.7 trillion yuan, which was up 6.2% from a year earlier and compares with a
6.4% rise in the January-October period
Expenditure under the government fund budget rose 5.5%, decelerating from a 9.8% increase in the first 10 months.
Total fiscal spending is
expected to total 26.3 trillion yuan this year, Finance Minister Liu Kun wrote in an article published by the official publication Study
That compares with expenditure of 24.6 trillion yuan in
2021.
-NovOctSeptAugJulyJuneMay
Year-to-date
2022
2022
2022
2022
2022
2022
2022
billion
yuanAugmented fiscal balance
-7,754
-6,662
-7,163
-6,020
-5,245
-5,052
-2,970General public budget
balance
-4,174
-3,294
-3,724
-2,713
-2,177
-2,367
-1,232General public
revenue
18,552
17,340
15,315
13,804
12,498
10,522
8,674General public
expenditure
22,726
20,633
19,039
16,518
14,675
12,889
9,906Govt fund
balance
-3,580
-3,368
-3,440
-3,306
-3,068
-2,686
-1,738Govt fund
revenue
6,016
5,217
4,590
3,998
3,338
2,797
2,195Govt fund
spending
9,596
8,585
8,029
7,304
6,406
5,483
3,933Source: Ministry of Finance
Note: The augmented
fiscal position includes the main general public budgets and the fund budgets for all levels of government
A positive number for balance means surplus, while a negative figure indicates deficit.
