China plans a wider budget deficit this year as the government adds fiscal fuel to monetary stimulus to cushion the economy’s slowdown while risks such as a local-government debt binge are reined in.
The government projects a budget shortfall of 1.62 trillion yuan ($258 billion) in 2015, the Ministry of Finance said in a report presented to the National People’s Congress in Beijing today. That amounts to about 2.3 percent of gross domestic product, it estimated.
China’s central government is assuming some of the debt incurred by local-government financing vehicles as it reshapes its fiscal framework. Premier Li Keqiang last week called for more active fiscal policy, while the central bank on Saturday announced its second interest-rate cut in three months.
Recommended Content
Editors’ Picks
EUR/USD hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD struggles to find direction, holds near 1.2550
GBP/USD stays under modest bearish pressure and trades near 1.2550 on Tuesday. The neutral risk mood, as reflected by the mixed action seen in US stocks, doesn't allow the pair to make a decisive move in either direction. The Bank of England will announce policy decisions on Thursday.
Gold rebounds to $2,320 as US yields edge lower
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.