Fiscal revenue, fiscal expenditure, government funds
In 2023, the general public budget and the government fund budget will both show the phenomenon of "short revenue and short expenditure", and the state-owned capital operating budget will show "excess revenue and short expenditure", reflecting the strong constraint effect of the revenue side on the expenditure side. Among them, the growth rate of general public budget revenue was 6.4%, down 0.3 percentage points from the budget at the beginning of the year, and the growth rate of expenditure was 5.4%, down 0.2 percentage points from the budget at the beginning of the year. The growth rate of budget revenue of government funds was -9.2%, down 9.6 percentage points from the budget growth rate at the beginning of the year, and the growth rate of actual expenditure was only -8.4%, down 15.1 percentage points from the beginning of the year.
In terms of general public budget revenue, fiscal revenue in December turned from positive to negative under the high base effect, with a year-on-year growth rate of -8.4% in the month. In terms of tax structure, the decline in export tax rebates in December expanded significantly, with import value-added tax, consumption tax, customs duties and consumption tax as the main supporting items. Individual income tax turned from positive to negative, recording -6.5%, which may reflect the impact of the increase in individual income tax deductions; corporate income tax turned from positive to negative due to the high base effect, recording -1.9%; import value-added tax, consumption tax and customs duties all increased significantly due to the positive growth rate of imports; consumption tax benefited from the sales of taxable consumer goods such as petroleum, cosmetics, gold, silver and jewelry, and the growth rate increased slightly to 5.2%.
In terms of general public budget expenditure, spending remained resilient in December, recording a year-on-year growth rate of 8.3% in the month. From the perspective of the direction of fiscal expenditure, fiscal expenditure in December was still biased towards people's livelihood expenditure, but the growth rate of people's livelihood expenditure declined, and the proportion of infrastructure expenditure increased. In terms of government funds, revenue rose in December due to the positive turn of land transactions, with a year-on-year growth rate of 6.2% compared with 1.2% in the previous month, and a significant increase in expenditure growth of 24.2%, which was affected by the low base effect and the low implementation progress in the previous period. From the perspective of the pace of issuance, as of February 1, the issuance of new local bonds is slow, or because special treasury bonds have undertaken more tasks to stabilize the growth of the year, it is expected to accelerate in the future. According to the press conference held by the Ministry of Finance, the issuance of treasury bonds is planned to be arranged in advance, and part of the new local government debt limit for 2024 has been issued in advance to promote the formation of physical workload.
Affair:
In December 2023, the national general public budget revenue was -8.4% year-on-year and 4.3% in the previous month, and fiscal expenditure was 8.3% year-on-year and 8.6% in the previous month. The national tax revenue was -7.8% year-on-year and 3.2% month-on-month, and the non-tax revenue was -10.3% year-on-year and 9.8% month-on-month. Government fund income was 6.2% year-on-year and 1.2% month-on-month, and government fund expenditure was 24.2% year-on-year and 1.7% month-on-month.
Comments:
In December 2023, the growth rate of fiscal revenue turned negative due to the impact of the base, and expenditure remained resilient, with the growth rate slowing slightly. The revenue side of government funds was driven by the recovery of local and market transactions, and the year-on-year growth rate of the month turned from negative to positive, and the expenditure side was affected by the low base and slow progress in the previous period, and the year-on-year growth rate of the month increased significantly.
1. Signals under budget surpluses
In 2023, the general public budget and government fund budget will both show the phenomenon of "short revenue and short expenditure", and the state-owned capital operating budget will show "excess revenue and short expenditure".
Under the pressure of the wave recovery of the economy and the decline of land revenue, the constraint effect of the revenue side on the expenditure side is stronger, and the two budgets are short-burned, and the expenditure of government funds is more constrained by revenue. In terms of the general public budget, due to the dual impact of the shrinking tax base and the policy of tax and fee reduction, the growth rate of real revenue was 6.4%, down 0.3 percentage points from the budget at the beginning of the year, and the corresponding expenditure growth rate was 5.4%, down 0.2 percentage points from the budget at the beginning of the year. In terms of government fund budget, the year-end revenue growth rate was only -9.2%, down 9.6 percentage points from the budget growth rate at the beginning of the year, dragged down by the decline in land. Following the principle of "revenue and expenditure", the growth rate of actual expenditure was only -8.4%, down 15.1 percentage points from the beginning of the year.
The growth rate of government fund expenditure is more significant than that of the revenue side compared with the budget at the beginning of the year, which may reflect the slow progress of the use of funds for special bond projects, and also reflect that the management of the use of special bond funds is also more stringent.
The state-owned capital operating budget can play a better role in supplementing the general public budget. In 2023, the state-owned capital operating budget will be transferred to the general public budget at the beginning of 2023 to transfer 216.5 billion yuan, and the final surplus at the end of the year will be 150.9 billion yuan.
According to the carry-over balance of the budget arrangement, the actual deficit rate of the general public budget and the broad deficit rate of the two budgets in 2023 are 4.6% and 7.0% respectively, which are both lower than those in 2022, or because the pressure to achieve the annual growth target in 2023 is relatively small. Compared with 2022, the actual revenue and expenditure gap of the general public budget in 2023 will be 5.7 trillion yuan, and the actual deficit rate will decrease from 4.7% to 4.6%, and the actual revenue and expenditure gap of government funds will be 3.1 trillion yuan, and the combined broad deficit rate of the two budgets will drop from 7.4% to 7.0%.
2. General public budget: tax revenue has turned from positive to negative, and the growth rate of expenditure has slowed down
Fiscal revenue turned from positive to negative, and both tax revenue and non-tax revenue decreased significantly. The year-on-year growth rate of fiscal revenue in December 2023 recorded -8.4%, compared with the previous value of 4.3%, which is related to the high base under the accelerated catch-up revenue progress in December 2022. Among them, tax revenue was -7.8% year-on-year in the month, and non-tax revenue was -10.3% year-on-year. After excluding the factor of the tax refund base, the year-on-year growth rate of fiscal revenue and tax revenue was -7.7% and -8.5% respectively. In 2023, the fiscal revenue will accumulate 21.7 trillion yuan, with a growth rate of 6.4%. Among them, the tax revenue was 18.1 trillion yuan, a year-on-year increase of 8.7 percent, and the non-tax revenue was 3.57 trillion yuan, a year-on-year decrease of 3.7 percent.
From the perspective of budget implementation, the revenue progress in December was 99.8%, 2.8 percentage points faster than the same period last year, and the annual budget was completed. In 2023, the pace of fiscal revenue will be fast and then slow, with the revenue progress of the four quarters being 29%, 26%, 22% and 23% respectively, which is at a middle level compared with the historical revenue progress.
In terms of tax structure, the decline in export tax rebates in December expanded significantly, with import value-added tax, consumption tax, customs duties and consumption tax as the main supporting items. In terms of direct taxes, both personal income tax and corporate income tax turned from positive to negative year-on-year in the month, dragging down tax growth. Personal income tax recorded -6.5%, compared with 0.4% in the previous month, which may indicate that personal income recovery is slower. On the one hand, the corporate income tax was affected by the high base, and on the other hand, it was also related to the year-on-year slowdown of social zero and the decline in real estate sales, recording -1.9% compared with the previous value of 9.9%. In terms of indirect taxes, driven by the positive growth rate of imports, import value-added tax, consumption tax and customs duties have increased significantly, which is the main support item. The growth rate of value-added tax turned from positive to negative, with the year-on-year growth rate of -1.9% in the month and the previous value of 8.3%, which was inconsistent with the increase in industrial added value, or mainly due to the high base effect of value-added tax. The growth rate of consumption tax increased slightly, recording a growth rate of 5.2% in the month and 4.2% in the previous month. Thanks to the pull of major taxable goods, the year-on-year growth rate of taxable consumer goods such as petroleum, cosmetics, gold, silver and jewelry rebounded in the month.
In terms of land and real estate-related taxes, the growth rate of most taxes declined, dragged down by the widening growth rate of commercial housing sales in the month. The deed tax slowed slightly to 0.5%, the decline in land appreciation tax increased to -35.1%, the cultivated land occupation tax fell to 3.6%, and the urban land use tax turned from positive to negative to -3.1%.
From the perspective of general public budget expenditure, the year-on-year growth rate of fiscal expenditure in December slowed down slightly, recording 8.3% and the previous value of 8.6%. The cumulative value of fiscal expenditure for the whole year was 27.4 trillion yuan, and expenditure remained resilient. From the perspective of expenditure progress, the progress of fiscal expenditure in December was 99.8%, and the budget was basically completed. In 2023, the pace of fiscal expenditure will first be fast, then slow and then accelerate, with the progress of fiscal expenditure in the four quarters being 25%, 24%, 23% and 28% respectively.
From the perspective of the direction of fiscal expenditure, fiscal expenditure in December was still biased towards people's livelihood expenditure, but the growth rate of people's livelihood expenditure declined, and the proportion of infrastructure expenditure increased. In terms of people's livelihood expenditure, the growth rate of livelihood expenditure such as education and cultural tourism turned from positive to negative, with the same period of -2.9% and -5.7% year-on-year respectively in the month, while social security expenditure declined, with a year-on-year growth rate of 8.6%, and health expenditure continued to grow negatively under a high base, with a decline of 13.4%. Expenditure on science and technology increased sharply year-on-year, recording 21.1%. In terms of infrastructure spending, the year-on-year growth rate of the month rose and fell, but both remained above 5%. In December, the growth rate of expenditure on energy conservation and environmental protection, agriculture, forestry and water, and transportation slowed down, recording 6.7%, 10.5%, and 11.4% respectively, and the expenditure of urban and rural communities increased year-on-year, recording 36.6%. In terms of the proportion of expenditure, infrastructure expenditure accounted for 27.9%, an increase from the previous month, but people's livelihood expenditure was still the main investment.
3. Government fund budget: the positive conversion of land transactions has led to an increase in income
In December, the revenue of government fund budget rose year-on-year, recording 6.2% compared with the previous value of 1.2%, and the growth rate of expenditure increased sharply, which was greatly affected by the low base effect, recording 24.2%, an increase of 22.5 percentage points from the previous month. The year-on-year growth rate of land transfer income was 1.8% in the month, and the growth rate turned from negative to positive. Correspondingly, the average listed price of land supply in 100 large and medium-sized cities increased sharply year-on-year, the year-on-year growth rate of land supply area turned from negative to positive, and the transaction of land and city improved slightly, which stimulated income. However, the land premium rate is still running at a low level, and the sustainability of the income recovery remains to be seen. On the expenditure side, the year-on-year growth rate of government fund expenditure increased to 24.2% in December from 1.6% in the previous month, which may be affected by the dual factors of low base effect and low progress of budget expenditure in the previous period.
From the perspective of revenue and expenditure progress, the progress of revenue and expenditure is lower than that of the same period in history, with the implementation rate of the revenue budget this year being 90.5% and the expenditure budget implementation rate of about 85.9%, both of which are lower than the budget at the beginning of the year. On the revenue side, the cumulative income of government funds is 7.1 trillion yuan, and the current revenue progress is far lower than the level of the same period from 2017 to 2021. On the expenditure side, the cumulative expenditure was 10.1 trillion yuan, which was lower than the level of the same period in history.
From the perspective of broad fiscal expenditure, the growth rate of infrastructure fiscal expenditure has improved slightly, which has played a certain supporting role in infrastructure investment. The growth rate of government fund expenditure, broad infrastructure expenditure and narrow infrastructure expenditure all rebounded slightly. The gap between revenue and expenditure in the broad sense was -8,842.4 billion yuan, which was narrower than that of the same period last year, but still relatively high compared with the same period in history.
From the perspective of local bond issuance, as of February 1 (including the scale of the network before February 6, the same below), the cumulative issuance of local bonds was 658 billion yuan. Among them, 372 billion yuan of new local bonds and 286 billion yuan of refinancing bonds were added, accounting for 43% of the total. Looking back at the issuance of local bonds in 2023, a total of 9,325.4 billion yuan of local bonds were issued in 2023. Among them, 4,645.1 billion yuan of new local bonds and 4,680.3 billion yuan of refinancing bonds were added, accounting for 50% of the total.
From the perspective of the pace of issuance, as of February 1, the issuance of local bonds took into account both new bonds and refinancing bonds, and the issuance of new bonds was slower than expected, and it is expected to accelerate in the future. At present, the pace of issuance is slow, or it is mainly due to the fact that 500 billion yuan of the additional treasury bonds issued at the end of 2023 will be reserved for use in 2024. At present, there are signs of acceleration in February compared with January, with 175.4 billion yuan of new bonds and 209.1 billion yuan of refinancing bonds issued in January, accounting for 45.6% of the new bond issuance, while in February, the issuance of new bonds was dominated by the issuance of new bonds, with the issuance of new bonds of 196.7 billion yuan and refinancing bonds of 76.9 billion yuan, accounting for 71.9% of the new bond issuance.
At a press conference held by the Ministry of Finance on February 1, 2024, it was mentioned that "in terms of treasury bonds, we will arrange the issuance of treasury bonds within the balance limit of treasury bonds reviewed and approved by the National People's Congress to provide support for ensuring the necessary expenditure intensity." In terms of local government bonds, in December 2023, after the Ministry of Finance fulfilled the approval procedures in accordance with the law, it has issued part of the new local government debt limits for 2024 to all localities in advance to support the construction of major projects, promote the formation of physical workload, and give full play to the role of local government bonds in stimulating the economy. [1] It can be seen that the issuance of treasury bonds in 2024 will be relatively high, and local bonds will also be actively issued and issued in advance to jointly promote the formation of physical workload.
Note: [1] Source: Ministry of Finance, "Transcript of the Press Conference of the State Council on the Annual Fiscal Revenue and Expenditure in 2023" (2024-02-01) [2024-02-01], http://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/202402/t20240201_3928049.htm.
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