Key points of the report:
The fiscal balance of payments further converged in November
1) In November, public financial revenue decreased by - 11.23% year-on-year, an increase of 11 percentage points over the previous month. Public financial expenditure in the month increased by 8.45% year-on-year, the fastest growth rate in the year. The fiscal revenue and expenditure gap has further converged.
2) By the end of November, the public revenue had reached 19.13 trillion yuan this year, accounting for 96.8% of the budget progress. Public financial expenditure reached 21.39 trillion yuan, accounting for 85.5% of the budget progress. Financial expenditure is still slower than the chronological progress.
The start of fiscal expenditure in the fourth quarter of this year was supported by the annual budget
From historical experience, the revenue and expenditure of public finance in the past few years can basically achieve the budget target, with a completion rate of 99% - 105%. If it is assumed that the revenue and expenditure target of this year can be completed, the fiscal expenditure in December still needs to be further accelerated.
As for the rhythm of annual fiscal revenue and expenditure, the regulators will dynamically adjust it according to the chronological progress
1) Fiscal revenue: deferred tax payment or the main adjustment tool this year. In the fourth quarter of this year, the tax payment of small, medium-sized and micro enterprises in the manufacturing industry was postponed for three months.
2) Fiscal expenditure: the issuance of local bonds accelerated in the fourth quarter, and the physical workload was formed as soon as possible.
On the policy side, the consensus on the fiscal front next year is forming
1) The central economic work conference clearly pointed out that we should ensure the intensity of fiscal expenditure and speed up the progress of expenditure. Infrastructure investment should be appropriately advanced.
2) At the briefing of the state information office, the leaders of the Ministry of finance put forward three principles for the issuance of special bonds: "early", "quasi" and "fast". Preparations should be "early". We will guide local governments to assign the quota in advance to the project as soon as possible, and start preparing the issuance plan before the end of this year to ensure that a considerable number of special bonds will be issued and used in the first quarter of next year; The issuing time should be "accurate". The issuance progress of special bonds shall match the progress of fund use. The use of funds should be "fast". The Ministry of finance will require provincial financial departments to summarize and count the actual use progress of special bonds on a monthly basis.
3) Recently, the Ministry of finance has issued a new special debt limit of 1.46 trillion in 2022 to all localities in advance, and will promote the issuance of the limit to form the physical workload as soon as possible.
This is not necessarily a good thing for urban investment bonds. After all, the risk of urban investment bonds increases marginally except for several provinces with very high quality and high fiscal revenue and expenditure multiplier.
Therefore, the acceleration of fiscal expenditure has promoted the differentiation of urban investment bonds. On the whole, if the supply of government bonds comes up and infrastructure investment reduces the downward pressure on the economy, the valuation risk of most subsequent urban investment bonds will rise. Urban investment bonds should be more cautious in terms of potential credit.
Risk tip: data statistics are biased, and economic and monetary policies exceed expectations.
