Special Purpose Bonds Key To 2023 Growth - Shanghai Securities News

Infrastructure spending will be a key driver in stabilising GDP growth in 2023, with special purpose bonds remaining an important financing facility to support an “active fiscal policy”, according to the Shanghai Securities News. The newspaper estimates special bond issuance for 2023 will be between 3-4 trillion yuan, similar to this year's amount, based on the advanced approval quota for new special bonds released recently by the authorities. Citing experts, 2022 will see a 12% y/y increase in infrastructure spending, which will add 1.2 percentage points to GDP growth this year. The bonds have typically been used to fund industrial park infrastructure, affordable housing projects, and to develop local banks. Local governments are currently reviewing applications for next year's projects.