Event:
On April 20, 2022, the Ministry of Finance released the financial data for March. In March 2022, the general public budget revenue was 3.4% year-on-year, and the cumulative year-on-year revenue from January to February was 10.5%; The general public budget expenditure in March was 10.4% year-on-year, and the cumulative year-on-year expenditure from January to February was 7.0%; The budget revenue of government funds in March was - 22.2% year-on-year, and the cumulative year-on-year revenue from January to February was - 27.2%; The budget expenditure of government funds in March was 69.1% year-on-year, and the cumulative year-on-year expenditure from January to February was 27.9%.
Core view:
In March, broad fiscal expenditure accelerated upward and entered the expansion period, and positive finance will continue to play a role in stabilizing growth. Among them, the epidemic has led to the pressure on China's economy, the weak growth of public revenue and the focus of expenditure on ensuring people's livelihood; Under the demand of steady growth policy, the issuance and use of special bonds were accelerated, the expenditure of government funds was significantly increased, and efforts were made to expand infrastructure.
Fiscal expenditure in a narrow sense: the expenditure will be accelerated again to ensure people's livelihood and expand infrastructure
The growth rate of general public budget expenditure is generally upward, with the focus on people's livelihood. In March, the growth rate of general public budget expenditure was 10.4%, higher than the cumulative growth rate of 7.0% from January to February. Due to the repeated impact of the epidemic, China's economy as a whole has weakened, the pressure of local "six guarantees and six stabilities" has increased, the focus of general public budget expenditure has significantly tilted to social security, employment, health and other livelihood areas, and the intensity of infrastructure expenditure has continued, but the proportion has fallen.
Budget expenditure of government funds: the use of special bonds continued to accelerate, pushing up infrastructure investment. Government fund expenditure in March increased by 69.1% year-on-year, higher than 27.9% from January to February, mainly related to the accelerated issuance and use of special bond funds. In addition, although the year-on-year decline of land transfer income is still as high as 20%, the year-on-year growth rate of expenditure related to the transfer income of state-owned land use right rose to 11.1%, or it is related to the accelerated use of local retained funds. This also shows that the negative impact of the decline in land transfer income since this year has not been reflected in the expenditure side.
Fiscal revenue: tax growth turned negative and the marginal of real estate improved
Dragged down by tax revenue, the year-on-year growth rate of general public budget revenue fell to 3.4% in March and 10.5% from January to February. Among them, the tax revenue fell to - 0.2% year-on-year and 10.1% from January to February; Non tax income rose slightly to 14.2% year-on-year, which is related to the local revitalization of idle assets and the increase of special income related to energy resources.
The growth rate of major taxes such as value-added tax, personal income tax and China consumption tax fell sharply. In March, affected by the epidemic, China's production and consumption activities were generally under pressure, and residents' income was also greatly impacted. In absolute terms, the personal income tax revenue in March this year was 60.2 billion yuan, lower than 68.1 billion yuan in the same period in 2020. The impact of the epidemic on Residents' income is even higher than that in the same period in 2020.
In addition, the prosperity of the land and real estate markets continued to be weak, but the decline in deed tax and land transfer income narrowed, and the year-on-year growth rate of land value-added tax rebounded, which may be related to the marginal recovery of the land market.
Broad fiscal expenditure: it accelerated significantly in March and entered the expansion period
According to our calculation, under the background of accelerating the expansion of fiscal expenditure and the recovery of net financing of government financial bonds, the growth rate of generalized fiscal expenditure (3mma) rose to 19% in March, higher than 6% from January to February. On April 18, the central bank and safe mentioned the need to ensure the reasonable financing needs of financing platform companies according to the principle of marketization on the premise of controllable risk and compliance with the law. Referring to historical experience, the financing environment of urban investment bonds may be expected to pick up in the future, which will further support the accelerated expansion of broad fiscal expenditure and continuously supplement the source of funds for infrastructure investment.
Risk tip: China's epidemic continues to repeat, and the income from land transfer has fallen more than expected.
