October 16, 2017 / 10:16 AM / 9 months ago

UPDATE 2-China Sept govt spending rises at slowest pace in 11 months

* Sept spending growth slows to 1.7 pct y/y

* Jan-Sept spending +11.4 pct y/y, slower than last year’s pace

* Govt revenue +9.2 pct y/y in Sept, +9.7 for Jan-Sept (Adds finance ministry comment in paragraph 6)

BEIJING, Oct 16 (Reuters) - Government spending in China, which rose rapidly early in 2017, increased at the slowest pace in 11 months in September, a possible sign that economic growth could ease slightly towards the end of the year.

The Ministry of Finance on Monday said government spending in September rose 1.7 percent from a year earlier, compared with 2.9 percent growth in August.

China has pledged a pro-active fiscal policy to support the economy, and analysts have credited Beijing’s pump-priming as one of the key factors underpinning solid growth this year.

For the first nine months of the year, state spending rose 11.4 percent, down from 13.1 percent in the January-August period. It has also fallen below last year’s pace of spending growth, which was 12.5 percent during January-September.

Government revenue in September rose 9.2 percent from a year earlier, faster than August’s 7.2 percent increase. For the first nine months of the year, government revenue was up 9.7 percent, down only slightly from the January-August rate but up from last year’s pace.

The growth rate for government spending is likely to slow in the fourth quarter of the year, finance ministry official Lou Hong told a news conference, but that budgetary targets for the year will be met.

The finance ministry is targeting a 6.5 percent increase in fiscal spending and 5 percent growth in revenue this year.

China’s economy has defied expectations of a slowdown this year, growing 6.9 percent in the first half. A government-led infrastructure drive has sparked a boom in construction and underpinned demand and prices for everything from steel to cement to other building products.

But investment growth has slipped in the past two months, including spending on infrastructure, leading some analysts to say growth could slow in the second half.

On Monday, the central bank’s website quoted the central bank governor, Zhou Xiaochuan, saying that annual growth in the 2nd half “may achieve 7 percent”. (Reporting by Beijing Monitoring Desk and Elias Glenn; Editing by Richard Borsuk and Jacqueline Wong)

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