China’s budget deficit will reach 3% of GDP – Kommersant
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Today, December 15, Reuters reported citing three unnamed knowledgeable sources that the Chinese leadership has agreed on the size of the budget deficit for 2024. It is noted that the deficit will amount to 3% of the country’s GDP, while this year the deficit reached 3.8%. The IMF estimates that China’s nominal GDP will be about $17.7 trillion in 2023.
According to experts interviewed by Reuters, the slight change in China’s budget deficit next year means the authorities want to maintain “fiscal discipline” and do not plan to use significant quantitative easing measures and the issuance of large domestic and foreign loans to reduce the deficit.
Two agency sources note that several government bond issues are planned to cover unplanned expenses. One of the issues will be worth about 1 trillion yuan ($146 billion). “The budget deficit in 2024 will be 3%, and the missing parts of spending will be financed through special issues of sovereign bonds,” the source told Reuters.
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