China Fiscal Revenue Slowdown Puts Liquidity Onus on PBOC
Bloomberg - Jan 30, 2015
China’s fiscal revenue increased the least since 1991 last year, curbing scope to boost the economy with government spending and leaving the onus on the central bank to boost liquidity.
Government revenue rose 8.6 percent in 2014, according to a statement on the Ministry of Finance’s website, down from 2013’s 10.2 percent increase and a peak of 32 percent in 2007. Public expenditure rose 8.2 percent, the least since 1987.
A property slump and declining factory profits have dented the central and local governments’ tax bases. With plans for “proactive†spending stymied by declining revenue, the People’s Bank of China has stepped up efforts to boost liquidity to an economy that last year expanded at the slowest pace since 1990.
