BEIJING (Reuters) - Government spending in China jumped by nearly a quarter in July to a three-month high as authorities accelerated spending on state projects and hiked wages of civil servants as planned, data showed on Wednesday.
Beijing hopes faster government spending and further monetary policy loosening in coming months will give a much-needed boost to flagging economic growth.
Just on Tuesday, China devalued the yuan by nearly 2 percent to engineer its biggest one-day fall since 1994 in a move seen by some as helping exports.
Fiscal expenditure jumped 24.1 percent last month compared with a year earlier, the Ministry of Finance said, as spending by the central government leapt 49 percent on the year to 236 billion yuan ($36.7 billion).
That was the biggest annual rise in fiscal expenditure since April, when outlays leapt 33 percent.
The ministry did not give a breakdown of July’s spending, saying only that it had jumped as governments pushed through projects already budgeted for and hiked government salaries.
But the data showed state spending on social security and employment benefits rose the fastest in the first seven months of the year, climbing 21.4 percent from a year-earlier period to 1.17 trillion yuan.
Spending on infrastructure was by comparison more modest, rising 17.8 percent on a yearly basis to 631 billion yuan.
Reflecting cooling growth, government revenues grew at a more muted pace as struggling businesses paid less income taxes. Corporate taxes paid by industrial companies fell 7.8 percent in July, the data showed.
Taxes paid by property firms in July grew 12.7 percent on a yearly basis, however, in part a reflection of a pick-up in the subdued housing market.
Yet in a sign the real estate market was not on a verge of a strong recovery, income earned by governments from selling state land plunged 38.2 percent in the first seven months as a gloomy outlook dampened developers’ appetites for land.
Hurt by falling land sale revenues, fiscal income rose 12.5 percent in July from a year earlier, slightly under June’s annual growth of 13.9 percent.
In the first seven months of the year, revenues rose 7.5 percent from a year-ago period, up slightly from 6.6 percent in the first six months.
Reporting by Winni Zhou and Koh Gui Qing; Editing by Kim Coghill