The mainland's fiscal expenditure surged 31.4 per cent last month from March last year while revenue fell, reflecting both Beijing's spending spree and moves to reduce taxes to battle the economic slowdown. The Ministry of Finance said yesterday fiscal spending swelled to 500.74 billion yuan (HK$567.79 billion) while revenue declined 0.3 per cent to 440.22 billion yuan. 'The smaller revenue decline of March compared with the previous months was due to non-economic factors including a low base last year,' the ministry said. 'The outlook for future months is not optimistic.' In the first quarter, revenue fell 8.3 per cent year on year to 1.46 trillion yuan while expenditure increased 34.8 per cent to 1.28 trillion yuan. Revenue declined because of falling corporate profits, sluggish trade, as well as tax cuts and exemptions. Expenditure increased owing to the 4 trillion yuan stimulus package. Beijing announced the package in November last year, with the central government saying it would spend 1.18 trillion yuan while local governments, banks and companies would invest the remainder. Most of the money would go towards infrastructure, construction of affordable housing, and other projects. With important March economic data to be released this week, speculation is growing that Beijing may unveil another stimulus package if the first-quarter figures fail to indicate an economic rebound. On Saturday, central bank adviser Fan Gang said the economic slide was unlikely to hit bottom soon and the country needed at least two or three years to complete its economic adjustments, state media reported. Expectations of a new stimulus package were 'unsuitable and unreasonable' because it still needed to be determined whether the previous policies had taken hold, Shanghai-based Oriental Morning Post quoted Mr Fan as saying. Mr Fan's comments came the same day that Premier Wen Jiabao said the economy was showing some positive signs even as it faced major challenges. Mr Wen said some indicators were 'better than expected'. He said industrial output grew 8.3 per cent last month, compared with a 3.8 per cent increase in the January-February period. Figures released last week showed the decline in foreign trade slowed last month and new loans by banks hit a record 1.89 trillion yuan. Gao Huiqing, an economist with the State Information Centre, said: 'Excessive fixed-asset investment could lead to overcapacity. We should work on consumption if there is a next round of stimulus efforts.' Mr Gao denied a China Securities Journal report yesterday that said he disclosed Beijing was working on a new stimulus package. The report boosted sentiment and contributed to a 2.84 per cent rally in the Shanghai share market. 'China's stimulus-led domestic recovery is well under way,' UBS economist Wang Tao said. 'There is no need for additional policy stimulus now. 'Given the pace that bank lending has been growing, the next policy move needs to be taming credit growth and local governments' investment drive to reduce the risk of massive resource misallocation, asset price bubbles and damage to the banking system.'