PUBLISHED ONJune 28, 2015 9:02 AM
BEIJING - China's economic slowdown has cut into fiscal revenues, making it harder for the central government to meet its full-year revenue target, Finance Minister Lou Jiwei was quoted as saying on Sunday.
Central government revenues were 2.95 trillion yuan ($475.19 billion) in the first five months of 2015, up about 2 per cent from a year earlier but below the budgeted growth rate of 7 per cent, the Xinhua news agency quoted Lou as saying.
Total national fiscal revenue reached 6.43 trillion yuan in the January-May period, up 3.1 per cent from a year earlier. That compared with the government's target of 7.3 per cent.
"With the new growth engines still in the making, external demand contracting with internal contradictions aggregating, there has been considerable downward pressure on the economy," Lou was quoted as saying.
The central government is facing "considerable pressures" to meet its fiscal revenue target this year, he said.
Local governments are struggling to cope with a mountain of debt and their tax receipts and land sales have taken a hit from the slowing economy and a property downturn, analysts say.
The government has budgeted a fiscal deficit for 2015 equal to 2.3 per cent of gross domestic product (GDP). Lou said in March the real fiscal deficit would be 2.7 per cent, the widest since 2009, after taking into account unspent amounts from previously allocated funds.
China's economic growth slowed to a six-year low of 7 per cent in the first quarter as demand at home and abroad faltered, and recent data showed weakness persisted into the second quarter.
Full-year growth is widely expected to slow to around 7 per cent - the weakest annual expansion in a quarter of a century.