January 22, 2013 / 8:49 AM / 5 years ago

China says 2012 fiscal deficit above target at 1.6 percent of GDP

BEIJING (Reuters) - China ran a fiscal deficit of 850 billion yuan ($136.6 billion) in 2012, or 1.6 percent of gross domestic product, the Finance Ministry said on Tuesday, slightly higher than the government’s target of 800 billion yuan, or 1.5 percent of GDP.

Fiscal revenues rose 12.8 percent in the year to 11.7 trillion yuan while fiscal expenditure climbed 15.1 percent to 12.6 trillion yuan, the ministry said.

The government had set a 2012 fiscal deficit target of 800 billion yuan in March last year.

Slower profit gains from companies and tax cuts reduced government revenue in 2012 compared to the previous year, the ministry said.

Tax revenues grew 12.1 percent in 2012, slowing from 22.6 percent growth in 2011, reflecting an economic slowdown in the world’s second biggest economy.

Value-added tax revenues rose 8.9 percent in 2012 on a year ago, while enterprise income tax was up 17.2 percent.

China’s central government spent 6.4 trillion yuan last year and local governments spent 10.7 trillion yuan, the ministry said.

State expenses for education jumped 28 percent in the 2012, while both agriculture, forest expenditure and affordable housing climbed 20 percent in 2012.

Spending on transportation climbed 9 percent to 817 billion yuan. China has been fast-tracking infrastructure projects this year in the hope of bolstering economic growth.

($1 = 6.2213 Chinese yuan)

Reporting by Aileen Wang, Shao Xiaoyi and Koh Gui Qing; Editing by Nick Edwards

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