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China’s planned fiscal expansion will boost growth
On October 24th, at the sixth meeting of the Standing Committee of the National People’s Congress (the legislature), Chinese legislators approved a plan to increase Treasury issuance by Rmb1trn (US$136.8bn). The budget deficit for 2023 will be increased from Rmb3.88trn (or 3% of GDP) to Rmb4.88trn (3.8% of GDP). This is the first time that China has adopted an intra-year budget revision since 2000. chart Why does it matter? We do not believe that the planned fiscal expansion is primarily aimed at boosting the economy, the necessity of which has been minimised by firming growth in the third quarter. Pressure on ... (full story)