FXStreet (Delhi) – Zhiwei Zhang, Chief Economist at Deutsche Bank, suggest that the faster than anticipated growth in China’s fiscal expenditure has raised hopes for further monetary stimulus from the Chinese authorities.
Key Quotes
“Fiscal expenditure grew by 25.9% yoy in August (24.1% in July), much faster that the 11.8% we saw in H1. Importantly, Zhiwei sees this as another strong signal of policy easing, with the acceleration of fiscal spending a reflection of the policy stance shift from tightening to stimulus that took place mid-way through this year, rather than one driven by seasonal patterns.”
“Zhiwei also points out that a broader concept of government expenditure which covers both the fiscal budget and government funds also showed similar acceleration.”
“On the other hand, growth of government revenue remains weak, but Zhiwei is optimistic that we will see improvement in Q4 though as we have already seen a strong pickup in land sales in recent months.”
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