BEIJING (Reuters) - China, which has left its 2017 budget deficit target unchanged from last year’s goal, should moderately control its budget deficit ratio, Vice Finance Minister Zhu Guangyao said on Sunday.
China has maintained a budget deficit target of 3 percent of gross domestic product for this year, underlining its focus on debt reduction and reform.
“We came up with the 3 percent deficit ratio after a process of careful assessment,” Zhu told reporters on the sidelines of the annual meeting of parliament. “We should moderately control the deficit ratio.”
The deficit target has been set at 2.38 trillion yuan ($344.68 billion), compared with 2.18 trillion budgeted a year earlier. That followed official data showing GDP grew 6.7 percent in 2016. The government has set a GDP growth target of about 6.5 percent for this year.
“Three percent is on par with last year, but because the size of our economy is larger, our actual deficit grows by 200 billion yuan,” Zhu said.
Beijing has tightened controls in recent years on new local-government debt to stave off risks from a binge of borrowing taken on to soften the impact of the global financial crisis.
“As the economy develops, our deficit ratio will trend lower,” Zhu said.
Reporting by Meng Meng and Ryan Woo; Editing by Stephen Coates