Article Summary
China’s four-month budget deficit reached a record high of 2.65 trillion yuan ($367 billion) in January-April, driven by fiscal stimulus to support the economy amid an escalating trade conflict with the US. This shortfall is 50% higher than the same period last year, reflecting a shift to higher gear in deploying this year’s planned fiscal stimulus.
What This Means for You
- Increased government spending on social security and employment might help workers vulnerable to the trade war.
- Expect higher expenditure on infrastructure and other projects backed by government bonds issuance.
- Future fiscal support urgency might decrease following the US-China truce and stabilizing economic activity numbers.
- The stabilization of revenue and accelerating government spending might reduce the need for expanding fiscal deficit in the middle of the year.
Original Post
(Bloomberg) — China’s fiscal stimulus pushed its four-month budget deficit to a record high, as the government ramped up support for the economy during an escalation in its trade conflict with the US.
Key Terms
- Fiscal stimulus
- China-US trade conflict
- Government spending
- Infrastructure investment
- Fiscal deficit
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