China fiscal revenue turns higher in March on recovering economic activity

BEIJING (Reuters) – China’s fiscal revenue rose in March, reversing a decline in January-February, as economic activity rebounded following the end of strict COVID curbs, but the finance ministry warned that revenue growth would slow in the second half of the year.

Fiscal revenue rose 0.5% in the first three months of 2023 versus the same period a year earlier, while fiscal expenditure rose 6.8% on year.

In March, fiscal revenue grew 5.5% after declining 1.2% in January-February, according to Reuters calculations based on the ministry’s data.

China’s economy grew at a faster-than-expected pace in the first quarter of the year, as consumers came out of crippling pandemic disruptions with a 4.5% rise in Q1 gross domestic product (GDP), although headwinds from a global slowdown point to a bumpy ride ahead.

“China’s economic rebound provides fundamental support for fiscal revenue growth, and the fiscal revenue growth will slow down in the second half of the year,” officials from the finance ministry said at a news conference.

In the second half of the year, the ministry said they will approve budgets in a timely way, speed up the issuance and use of special local government bonds and improve preferential treatment for taxes and fees.

(Reporting by Liangping Gao and Ryan Woo; Editing by Christopher Cushing and Sonali Paul)