Macroeconomic data suggest sanguine H2

The positive growth in China's fiscal revenue in June, after deducting the impact of tax refunds, points to a brisk economic recovery and bodes well for fiscal revenue growth in the second half, officials and experts said on Thursday.

The national general public budget revenue expanded 5.3 percent year-on-year in June after deducting the decrease in revenue brought about by tax refunds－compared with a negative growth in May, the Ministry of Finance said on Thursday.

During the first half, fiscal revenue came in at 10.52 trillion yuan ($1.56 trillion), up 3.3 percent year-on-year after excluding the impact of tax refunds. The growth was 0.4 percentage point faster than in the first five months of the year, the ministry said.

Xue Xiaoqian, deputy head of the ministry's treasury payment center, said the country's fiscal revenue recovered last month as efforts to combat COVID-19 outbreaks and stabilize the economy took effect.

"The economy is likely to see a continuous recovery in the second half, helping fiscal revenue to register a gradual rally," Xue said.

Feng Qiaobin, deputy head of the Development Research Center of the State Council's department of macroeconomic research, said the positive growth in fiscal revenue－a key barometer of economic activities－indicated that the worst of the economic performance was over and the economy has returned to a normal track of growth.

Apart from improving economic prospects, the fading impact of tax refunds will also help fiscal revenue to register positive growth in the second half, Feng said.

Taking the decrease in revenue brought by tax refunds into consideration, the country's fiscal revenue dropped by 10.2 percent in the first half, compared with a 10.1 percent decrease during the January-May period.

China has launched large-scale value-added tax credit refunds this year to alleviate cash flow pressure on enterprises. The outstanding VAT credits of eligible small and micro businesses and enterprises in six industries, including manufacturing, were scheduled to be refunded from April to June.

From April to June, a total of 1.865 million taxpayers received 1.72 trillion yuan in tax refunds. Over the first half, the number amounted to 1.85 trillion yuan, 2.9 times the amount for the whole of 2021, data from the ministry showed.

The tax refunds came in as part of the Finance Ministry's efforts to frontload policy support to offset downward economic pressure, such as on the fronts of financing infrastructure project construction and beefing up fiscal spending.

Local governments had issued 3.41 trillion yuan in new special bonds as of the end of June, meaning that the 2022 quota of new special bonds for project construction had largely been completed, much earlier than witnessed in previous years.

The country's fiscal expenditure stood at 12.89 trillion yuan in the first half, up 5.9 percent from a year earlier. The growth rate was 1.4 percentage points higher than the same period of last year, according to the ministry.

In the second half, efforts will be made to facilitate the physical construction work funded by special bonds, further put into place the tax refund policy and rectify problems met by local fiscal authorities in a timely fashion－all to stabilize the economy within a reasonable range, the ministry said.