Data released by the Chinese Ministry of Finance showed that in the first three months of 2024, China's budget revenues fell by 2.3% per annum due to the influence of some special factors, including the previous tax reduction policy.
Meanwhile, in the 1st quarter, tax revenues fell by 4.9% per annum, to 4.9 trillion yuan. Excluding the impact of special factors such as the high tax base and tax reduction policy in 2023, budget revenues increased by about 2.2% from January to March 2024.
The data also showed that budget spending increased by 2.9% per annum, to almost 7 trillion yuan, slowing significantly from the 6.7% growth seen in the first two months.
Wang Dongwei, vice finance minister, stated that the Ministry of Finance will support technology-led industrial innovation with "full support" and shore up technology innovation and manufacturing development with tax and fee cut policies. Against the background of weak domestic demand and the crisis in the real estate market, this year the government switched its attention to investing in high-tech production to support the economy.
Last week, Bank of America raised its outlook for full-year GDP growth to 5.0% from 4.8% and raised its 2025 forecast to 4.7% from 4.6%. The upward revision comes after China saw 5.3% growth in the first quarter thanks to the county's infrastructure and manufacturing investments.
Meanwhile, the IMF left unchanged its forecast for China's 2024 growth to fall to 4.6% from 5.2% in 2023, with a further drop to 4.1% for 2025.