MNI BRIEF: China's H1 Fiscal Gap Widened On Covid Impact: MOF

China's government balance sheet deteriorated as the fiscal gap expanded in the first half of the year based on lower tax and land sale revenues and increased spending on stimulus measures. officials at the Ministry of Finance told reporters on Thursday in a briefing.

General fiscal revenues decreased by 10.2% year-on-year in H1 to CNY10.5 trillion, while fiscal spending grew by 5.9% on year to CNY12.9 trillion, said Xue Xiaoqian, officials at the MOF.

THe MOF noted income taxes slumped 14.8% on year and government-managed funds revenue, 90% of which is from land sales, dropped 28.4%. The value-added tax credit refunds totaled CNY1.8 trillion in H1 to support the economy, he said.

As the pandemic situation eases and the economy recovers, the fiscal condition will improve, he said, pointing out revenues are expected to turn positive, and authorities will push local governments to accelerate the use of funds from special bonds in the second half..