OctaFX | OctaFX Forex Broker
Best Forex
broker 2019
Open account Sign in
en
    OctaFX | OctaFX Forex Broker
    Sign in
      Open account
      Back

      China state media: China should tolerate larger budget deficit - Reuters

      According to reporting by Reuters, Chinese state-run newspaper China Securities Journal is urging the government that tells it what to write to seek to slow down its deleveraging agenda in favour of increasing the budget deficit in order to support the Chinese domestic economy.

      Key quotes

      As an effort to steady rising debt levels after years of credit-fuelled investment, China cut its annual budget deficit target this year - a first since 2012 - to 2.6 percent of gross domestic production (GDP) from 3 percent in 2017. But slowing growth momentum stemming from structural changes in the economy and trade uncertainties call for a more “positive” fiscal policy in 2019 to ramp up infrastructure investment, China Securities Journal said in a front-page editorial on Friday.

      “And as infrastructure projects are mainly funded by the government, the recovery in infrastructure investment needs an increase in fiscal deficit as support,” it said, adding that allowing a bigger deficit would also offset the impact of a drop in fiscal revenues due to planned tax cuts.

      The newspaper suggested that China should not be too concerned about maintaining the deficit target within 3 percent of GDP.

      Central bank research head Xu Zhong had said earlier this year China should rely more on fiscal policy to support the economy, adding that the government should use fiscal funds to replenish the capital of state-owned financial institutions and ease the strain in financial market deleveraging.

      Some economists believe growth could cool to as low as 6 percent in 2019, which would be the weakest expansion for China since 1990.

      Forex Today: CNH bid, JPY offered as Trump backed China's upbeat comments on trade

      Forex today saw mild risk-on action with Chinese yuan pushing higher against the greenback and JPY crosses picking up a bid, tracking mild gains in th
      Read more Previous

      China: Trade surplus likely to increase to $54.1bn in Nov - TDS

      Analysts at TD Securities suggest that based on their models, and following dire export/import PMIs in recent months, they expect China’s imports and
      Read more Next
      Start livechat