Research conclusion
Event: on April 20, 2022, the Ministry of Finance announced the latest financial revenue and expenditure. From January to March 2022, the national general public budget revenue was 6.2 trillion yuan, a year-on-year increase of 8.6%. The national general public budget expenditure was 6.4 trillion yuan, a year-on-year increase of 8.3%. The revenue of national government funds was 1.4 trillion yuan, a year-on-year decrease of 25.6%. The national government fund expenditure was 2.5 trillion yuan, a year-on-year increase of 43%.
The downward pressure on the economy has increased in stages, and tax growth continues to decline, dragging down the growth of general public revenue. The local epidemic was widespread and frequent, and affected 30 provinces at the same time. The difficulties and challenges faced by the economy increased significantly, which led to a further year-on-year decline of 2.4 percentage points to 7.7% in March. Among the main taxes, the cumulative value-added tax, consumption tax and personal income tax were 3.6%, 15.8% and 16.5% respectively year-on-year, down 2.5%, 2.9 and 30.3 percentage points respectively from the previous value.
The epidemic has further boosted the growth rate of expenditure in the field of people’s livelihood. From January to March, the cumulative national general public budget expenditure increased by 1.3 percentage points compared with the previous value, of which the cumulative funds invested in infrastructure (energy conservation and environmental protection, urban and rural community affairs, agriculture, forestry and water affairs, transportation) were 8.4% year-on-year, unchanged from the previous value, with a slight increase of 0.4 percentage points to 21.4%, but still lower than the level at the end of last year (23.2%, 23.3% and 23.8% respectively in October, November and December 2021); The cumulative funds invested in the field of people’s livelihood (education expenditure, culture, tourism, sports and media expenditure, social security and employment expenditure, health expenditure) were 7.3% year-on-year, an increase of 1.1 percentage points over the previous value. The cumulative year-on-year growth rate of people’s livelihood items other than education increased by at least 2 percentage points, or it is related to the recurrence of the recent epidemic.
The gap in revenue and expenditure growth of government funds has widened significantly, and the progress of expenditure has exceeded that of previous years. From January to March, the cumulative income of government funds increased by 1.6 percentage points compared with the previous value, of which the cumulative income from the transfer of state-owned land use right was – 27.4% (the previous value was – 29.5%), which still dragged down the income of government funds; The cumulative expenditure of government funds increased by 15.1 percentage points compared with the previous value, and the expenditure progress reached 17.8%, the second highest value since 2016, and the physical workload accelerated.
The issuance of special bonds was basically completed in advance. According to wind, as of April 20, the amount of special bonds issued accounted for 36.5% of the amount of new local government special bonds in 2022, up only 0.9 percentage points from March. We believe that this is because as of the end of March, the progress of wholesale banks in advance has reached 86% (according to the regular policy briefing of the State Council). Among them, 11 provinces including Inner Mongolia, Liaoning, Heilongjiang, Shanghai, Zhejiang, Fujian, Shandong, Guangdong, Guangxi, Sichuan and Gansu have all completed the issuance of quotas in advance, while the new special bond quotas have just been issued on March 30.
The positive fiscal characteristics in the March data are prominent, and the subsequent reduction of revenue and increase of expenditure may continue to be maintained. The prevention and control of the epidemic is still tight. It is expected that fiscal expenditure will remain stable and take stabilizing the macro-economic market as the important goal: (1) infrastructure is still an important starting point for this year’s finance. At present, there is sufficient fiscal space. Recently, the national Standing Committee and the press conference of the State Council repeatedly mentioned that making good use of government bonds to expand effective investment is an important measure to drive consumption, expand domestic demand and promote steady growth of employment. (2) In the face of repeated epidemics and more complex and severe external environment, the government will try its best to keep 150 million market players in the short term. On the one hand, some measures have been implemented, such as the large-scale retention and tax rebate policy, which has been implemented since April 1, with a scale of about 1.5 trillion, mainly for six industries, including manufacturing, scientific research and technology services, software and information technology services, It helps to directly improve the cash flow of these enterprises. On the other hand, in view of the gradual amplification of the current downward pressure on the economy, more measures are expected to be introduced: finance minister Liu Kun wrote in Qiushi magazine on April 16 that this year’s finance should strengthen support for market players and strive to stabilize enterprises and ensure employment.
Risk tips
The impact of the epidemic situation on the construction progress of the government and the impact of the epidemic situation on the logistics fund.
The downward pressure on the economy exceeded expectations, affecting fiscal revenue and squeezing fiscal space for the whole year.
