TEHRAN, Mar 07 -China’s decision to increase its budget deficit ratio to 2.8 percent this year from 2.6 percent in 2018 is appropriate for the economy, and leaves room for policymakers to maneuver, Finance Minister Liu Kun said on Thursday.
TEHRAN, Young Journalists Club (YJC) -But a proactive fiscal policy does not mean China will open the floodgates for stimulus, Liu said at a news conference on the sidelines of the annual parliamentary meeting in Beijing, reiterating past government pledges of restraint.
Global investors are closely watching how forcefully Beijing will support the economy after growth in 2018 slowed to a near 30-year low. A key market focus is how policymakers will balance the need for growth against the threat of a further flare-up in financial risks and debt.
“We will not spend a penny that is not supposed to be spent, and we’ll strive to guarantee the money that is supposed to be spent,” Liu said.
Premier Li Keqiang told the opening of parliament on Tuesday that China is planning billions of dollars in additional tax cuts and infrastructure spending, amid pressure from softer domestic demand and a trade war with the United States.
The premier also announced the slightly higher target for the budget deficit to GDP ratio and a lower annual economic growth target of 6-6.5 percent, both of which had been widely expected.
Source: Reuters
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