Events
On April 20, 2022, the Ministry of Finance announced the fiscal revenue and expenditure in the first quarter.
The better growth of fiscal revenue in the first quarter and the first quarter is due to the good start of the economy and the rising price of bulk commodities. The impact of the epidemic on finance will be mainly reflected in the second quarter
Overall, China's fiscal revenue started smoothly in the first quarter, but it is mainly the foundation laid in the first two months. Since March, affected by the multi-point spread of China's epidemic, the downward pressure on the economy has increased, and the general public budget revenue and land transfer revenue have been affected, but the real impact will be mainly reflected in April and the second quarter. Due to the great downward pressure on the economy, all parties have high hopes for the lack of total demand for infrastructure hedging, and the fiscal expenditure side has obviously moved forward.
First, driven by factors such as higher than expected economic growth from January to February, high commodity prices and centralized payment and warehousing of deferred tax revenue, the general public budget revenue in the first quarter increased by 8.6% year-on-year. However, the negative impact of the rebound of the epidemic since March has appeared. The growth rate of general public budget revenue in March was only 3.4%, down 7.1 percentage points from January to February. From the perspective of fiscal quality, the proportion of tax revenue in general public budget revenue in the first quarter was 84.5%, and the quality of fiscal revenue as a whole remained at a high level. However, the growth rate of tax revenue in March changed from positive to negative to - 0.2%, down 10.3 percentage points from January to February. Driven by the multi-channel revitalization of idle assets in some regions and the increase in energy prices, non tax revenue accelerated by 14.9% in March, 1.2 percentage points higher than that from January to February.
In terms of provinces, 19 of the 21 provinces with published data have achieved positive growth in general public budget revenue, including resource-based provinces such as Shanxi (51.4%), Xinjiang (45.9%) and Shaanxi (34.2%).
In terms of tax categories, the rise in energy prices, the high prospect of trade and the supplementary payment of individual tax under strict supervision led to a high increase in resource tax (94.2%), import value-added tax, consumption tax (24.2%) and personal income tax (16.5%) in the first quarter. However, in the context of the rebound of the epidemic and the high base, the growth rate of personal income tax (- 51.3%), China consumption tax (8.6%) and value-added tax (- 4%) fell sharply in March. The growth rate of land and real estate related taxes is still relatively low.
Second, fiscal expenditure has moved forward, the progress has been significantly accelerated, and the growth rate of infrastructure expenditure has increased, becoming an important force driving the economy. In the first quarter, the general public budget expenditure increased by 8.3% year-on-year, significantly higher than the average growth rate of 0.1% in the same period of 20202021. In terms of expenditure progress, 23.8% of the annual budget expenditure progress was completed in the first quarter, the highest in recent three years. Among them, the expenditure related to infrastructure in the first quarter was close to 1.4 trillion yuan, with a year-on-year increase of 8.4%, 18.7 percentage points higher than the average growth rate in the same period of 20202021. It is not appropriate to carry out infrastructure related activities ahead of schedule. Accordingly, the cumulative growth rate of infrastructure construction in the first quarter was 10.5% year-on-year, 7.5 percentage points higher than the average growth rate in the same period of 20202021.
Third, the real estate downturn led to a sharp decline in land transfer income by nearly 30%, but with the accelerated issuance and use of debt, it promoted steady growth. Despite the recent deregulation of real estate related policies, the sales area and sales of commercial housing in the first quarter still decreased by 13.8% and 22.7% year-on-year. Under the superposition of multiple factors such as the slow pace of land promotion by local governments and the cautious land acquisition of real estate enterprises, the land market maintained a low temperature trend in the first quarter, and the budget revenue of government funds decreased by 25.6% year-on-year, of which the revenue from the transfer of state-owned land use rights decreased by 27.4% year-on-year.
However, in the context of accelerating the issuance and use of debt, the government fund expenditure in the first quarter was 43.0% year-on-year, which was not only significantly higher than - 12.2% in the same period of 2021, but also higher than - 3.7% in the whole year of 2021. Since the beginning of the year, the issuance and use of and debt has accelerated, and a total of 1298.1 billion yuan of new and debt has been issued in the first quarter. Among them, a total of 1.25 trillion yuan was issued in advance, completing 86% of the amount issued in advance; Financial departments at all levels have allocated 852.8 billion yuan of bond funds to project units, accounting for 68% of the new bonds issued.
II. What will be the financial situation in the next stage?
In the second quarter, the economy will face greater downward pressure, with the superposition of large-scale tax rebate policies and the extension of the implementation period of some preferential tax policies. The growth rate of fiscal revenue will continue to decline further, while the probability rate of land transfer revenue will continue to negative growth, and the actual disposable financial resources of local governments are limited; At the same time, the scale of anti epidemic and relief expenditure will be increased. It is difficult for local governments, especially grass-roots governments, to balance their revenue and expenditure, so they should be given sufficient transfer payment.
In the current situation of shrinking demand and sluggish expectation, the role of monetary policy in the economy is relatively limited, which is mainly reflected in the difficulty of transforming broad money into broad credit; At this time, the tax reduction, fee reduction and tax rebate of the fiscal policy are conducive to improving the ability to resist risks, expanding expenditure, improving the growth rate of infrastructure and expanding total demand. Therefore, finance will play a greater role. However, we should also prevent the tendency of "all risks are concentrated in two finance", and comprehensively implement measures to solve the difficulties faced by micro subjects.
The third is to strengthen the "bottom line" of financial transfer from the central government to the local government. The first thing is to speed up the issuance of bonds, increase investment in high-quality projects, expand effective investment, and promote infrastructure investment as soon as possible.
Third, actively implement the policies of tax reduction, fee reduction and tax rebate, implement the deferred payment of social security fees, improve cash flow and improve the anti risk ability of market subjects. However, while striving to expand the intensity of tax reduction and fee reduction, we should pay attention to precision and focus on the rescue of small, medium-sized and micro enterprises, high-quality development of manufacturing industry and scientific and technological innovation.
Fourth, provide unemployment compensation and temporary living compensation to vulnerable groups to reveal the social obstacles and people's livelihood, so as to ensure social stability.
Risk warning: the epidemic situation is repeated and the economic recovery is not as expected
