Fiscal revenue declined 6.7 per cent for first five months, Beijing says

PUBLISHED : Thursday, 25 June, 2009, 12:00am
UPDATED : Thursday, 25 June, 2009, 12:00am

The mainland's fiscal revenue continued to shrink in the first five months of this year, underscoring rising pressure to fund a spending spree aimed at recharging the economy.

Government fiscal revenue reached 2.7 trillion yuan (HK$3.1 trillion) in the period, down 6.7 per cent, or 195.6 billion yuan, over the same period last year, Finance Minister Xie Xuren told senior lawmakers yesterday.

The latest figures suggested some improvement from the first four months of this year, when fiscal revenue deceased 9.9 per cent year-on-year. In the first three months, fiscal revenue dropped 5.2 per cent year-on-year, according to the ministry, which does not usually issue monthly data.

The statistics also suggested the government faced a tough challenge in fulfilling its target of 8 per cent growth in fiscal revenue to fund its massive stimulus package.

Mr Xie revealed the numbers in a report to the ninth session of the Standing Committee of the 11th National People's Congress.

The central government unveiled a 4 trillion yuan stimulus package in November to be spent over the next two years, with 1.18 trillion yuan from the central budget.

Last week, the World Bank said it expected the mainland to see its fiscal revenue for 2009 drop 5 per cent, and that fiscal expenditure would slow in the remaining months of the year.

The bank forecast the fiscal deficit would make up 5 per cent of gross domestic product this year, versus 3 per cent expected by Beijing.

Mr Xie cited a slump in exports, shrinking corporate profits and tax cuts as the main reasons behind the deceasing fiscal revenue, which includes tax receipts and other income.