Focus this week:
From January to February, the financial data achieved a “good start”, the investment of funds was accelerated, and efforts were made to stabilize growth. However, structurally, infrastructure warming and land cooling coexist, pointing to that infrastructure investment will continue to rebound, while the downward pressure on the growth rate of real estate investment is still on, the foundation of economic recovery is not stable, and the steady growth policy still needs further efforts.
Fiscal expenditure in a narrow sense: keep moving forward, and infrastructure investment is expected to continue to increase at a high rate
The warming of infrastructure expenditure is an important signal of fiscal release in the beginning of the year. Considering that the reserves of infrastructure projects are relatively sufficient this year, the accelerated investment and use of financial funds will contribute to the formation of subsequent physical workload and support the further development of infrastructure investment. From January to February, the general public budget expenditure increased by 7% year-on-year, of which the growth rate of infrastructure expenditure reached 8.4%, significantly higher than – 6.0% in 2021. From January to February, the expenditure of government funds increased by 27.9% year-on-year, which was significantly higher than that in the fourth quarter of last year, indicating that the use of special debt funds retained at the end of last year is accelerating, which is related to the early commencement of major projects in various regions this year. At the same time, since this year, the pace of special bond issuance has been significantly accelerated, and continued to increase in the field of infrastructure.
Fiscal revenue: the marginal of production and consumption has improved, and the land market is still cooling down
At the beginning of the year, the fiscal revenue showed obvious differentiation, and the tax revenue represented by value-added tax, consumption tax and personal income tax performed well, while the deed tax and land transfer income indicating the magnanimity of the land market scene fell sharply. From January to February, the year-on-year growth rate of value-added tax, personal income tax and Chinese consumption tax revenue reached 6.1%, 46.8% and 18.7% respectively, while the year-on-year growth rate of deed tax and state-owned land use right transfer revenue decreased by 25.8% and 29.5% respectively, indicating the coldness of land market transactions. Considering that this trend has continued since the beginning of the year, it will continue to drag down the subsequent land transfer revenue, and the government fund revenue is difficult to change in the short term.
Broad fiscal expenditure: from contraction to rise
The broad fiscal expenditure indicators we observed show that the growth rate of broad fiscal expenditure (3mma) rose to 7% from January to February this year, higher than – 3% in December last year. Continuing the upward trend since the fourth quarter of last year, it will provide financial guarantee for subsequent steady growth.
Global central banks:
The Fed announced an interest rate increase of 25 basis points, which is in line with market expectations and may announce the start of table contraction as soon as may; European Central Bank President Lagarde predicts that the economy will continue to grow strongly in 2022, the uncertainty around the outlook will increase significantly, and the inflation situation is unlikely to return to the pre epidemic level.
Overseas policy:
The situation in Russia and Ukraine has eased, and the two sides are expected to reach a compromise, but it still takes time; The British government plans to launch a radical new “energy strategy” within two weeks.
China Policy:
The financial stability and Development Commission of the State Council said to maintain the stable operation of the capital market; The first video call between China and the US dollar to strive for the return of China US relations to the track of stable development; The office of the national health and Health Committee issued the “New Coronavirus pneumonia diagnosis and treatment plan (trial version ninth)”.
Risk tip: China’s epidemic continues to repeat, and the income from land transfer has fallen more than expected
