China's fiscal deficit ballooned to an all-time high of nearly $1 trillion in the first nine months of the year, analysis of government data by Bloomberg showed, as a real estate crisis and tax rebates to boost a cooling economy emptied government coffers.

The budget shortfall for all levels of government from January to September was 7.16 trillion yuan ($980 billion), according to an analysis based on data released by Beijing's Ministry of Finance on Tuesday -- almost three times the 2.6 trillion shortfall over the same period last year.

Overall government revenue dropped 6.6 percent to 15.3 trillion yuan from January to September as the government dolled out more tax rebates to businesses, according to the finance ministry.

Fiscal expenditure then rose 6.2 percent to 19.04 trillion yuan in the first nine months, following a government-driven infrastructure push to boost growth and create employment.

China's economy grew 3.9 percent year-on-year in the third quarter, data showed this week, beating expectations.

But President Xi Jinping's re-election to a historic third term as leader of the Communist Party spooked investors Monday, with China's currency slumping and stocks in Hong Kong nosediving to their lowest level since the global financial crisis.

China is also battling an unprecedented crisis in its real estate sector, which makes up more than a quarter of the country's GDP when combined with construction.

In October, second-hand home prices fell by the highest month-on-month rate since 2014.

"The housing market is still stuck in a downward spiral, global demand is set to cool further, and the weak renminbi is constraining the central bank's ability to provide policy support," Julian Evans-Pritchard from Capital Economics wrote in a research note.

Consumer demand has also been dampened by sudden lockdowns and strict travel restrictions under Beijing's strict zero-Covid policy.

China is the last of the world's major economies still sticking to a zero-Covid strategy.

"There is no clear sign of a significant easing of the zero-Covid strategy," Ting Lu, chief China economist at Nomura, said, adding that at least 207 million people were under some form of lockdown across 28 cities in China earlier this week.

"The actual economic recovery momentum is not strong," he added.

prw/oho/mtp

NOMURA HOLDINGS

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The Space Media Network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceMediaNetwork Contributor $5 Billed Once credit card or paypal		SpaceMediaNetwork Monthly Supporter $5 Billed Monthly paypal only

HSBC profits slide on bank impairment charges
London (AFP) Oct 25, 2022
Global bank giant HSBC on Tuesday announced tumbling profits for the third quarter on impairment charges linked to a weak economic outlook and its upcoming sale of French retail operations. The London-headquartered bank's share price was down nearly seven percent in early afternoon deals, making it the biggest faller on the British capital's FTSE 100 index. HSBC also announced a boardroom shake-up with the appointment of a new chief financial officer, as the Asia-focused lender faces headwinds i ... read more