We have always stressed the importance of fiscal data. The financial data are true and reliable without statistical problems such as sample deviation and caliber adjustment, and the data quality is high. We can use fiscal data to observe the current state of the economy. Especially at the current time point, the epidemic deeply disturbed the economic rhythm, and the traditional statistical data lost the reference anchor. In this case, the financial data will have greater reference value.
How much pressure on people's livelihood during the anti epidemic period?
Since March, the epidemic in East China has had a profound impact on China's economy. The impact of this round of epidemic is completely different from the past. The key is that the supply chain is blocked under this round of epidemic, which will affect industrial production and export. The epidemic and epidemic prevention policies have suppressed the demand side, but the epidemic in East China has also impacted the supply side. We can imagine the pressure on the economy and people's livelihood.
Personal income tax in March was - 51.3% year-on-year, which was also the year of the epidemic. The compound year-on-year growth rate of personal income tax in 2020 and 2021 was 16.3% (March), which was significantly better than the growth rate of personal income tax of - 51.3% this year.
In March, the individual income tax was low year-on-year, disturbed by the tax rebate policy. However, it is undeniable that the individual income tax of - 51.3% was the lowest level in the same period in history. Even during the global financial crisis, the individual income tax in March 2009 was as low as - 16% year-on-year.
The individual income tax performance in March undoubtedly means that the resident income shrank in March. We know that nearly 80% of the individual income tax comes from the tertiary industry, and a considerable part of the individual income tax comes from individual industrial and commercial households. In March this year, the epidemic in East China impacted the service industry, and the PMI index of the service industry fell rapidly, which confirmed that the current small and medium-sized enterprises and low and middle wage groups had to face the sharp decline of income again in this round of epidemic.
Who is leveraging against the epidemic?
In March, the issuance of special bonds raised 420.5 billion yuan, significantly expanding compared with the same period in previous years. From 2019 to March 2021, the average financing scale of special bond issuance was 172.6 billion yuan, and the government leverage increased rapidly.
Social finance in March can also confirm this point. In addition to government bonds, medium and long-term corporate loans and urban investment bonds were also important drivers of social finance expansion in March. Corresponding to the economic data, we do see that the main contribution of GDP in the first quarter is infrastructure.
At this stage, China's active and truly effective anti epidemic economic policies are relatively limited, and real estate and finance are the two most important policies. Since the beginning of the year, the real estate has not seen obvious repair. It can be said that the current obviously active and promising anti epidemic policy still depends on the government's leverage and massive infrastructure.
Looking forward to the future, what is the financial stamina?
The fiscal data of the whole first quarter showed that the fiscal expenditure was active, but the fiscal revenue was limited, and the fiscal revenue and expenditure gap in the first quarter was huge.
In the first quarter, the pressure on the income side mainly came from the lack of land transfer fees. At present, real estate sales and land acquisition of real estate enterprises are too sluggish. In March, tax pressure began to appear, especially value-added tax and individual income tax. The former is highly related to GDP and the latter is related to residents' income. Both of them show pressure under the oppression of the epidemic. In the future, the pressure of tax and land transfer income may further increase.
In terms of expenditure, we saw a significant expansion of infrastructure in the first quarter. We are worried about the financial expenditure pressure related to epidemic prevention caused by local closures. The pressure of fiscal expenditure may only increase but not decrease in the future.
The impact of this round of epidemic in East China on the economy is reflected in all aspects, suppressing consumption and investment, impacting exports and production, and further causing exchange rate pressure and inflation changes. In addition, the current round of epidemic in East China will also challenge the balance of fiscal revenue and expenditure. Pay attention to the impact of this round of epidemic on financial stamina.
Risk tip: the economic trend exceeded expectations and the real estate policy exceeded expectations; The epidemic development exceeded expectations.
