China's fiscal revenue in May signals recovery

An increase in China's fiscal revenue in May

indicates a recovery in the economy and leave the government more room to

employ fiscal measures to boost it, Tuesday's China Daily quoted experts.

The country's fiscal revenue in May rose 4.8 percent year on year to

656.95 billion yuan (96.05 billion U.S. dollars), reversing the downward

trend of the past few months, the Ministry of Finance (MOF) said yesterday.

Aggregate central and local government revenues in the first five months

stood at 2.71 trillion yuan, down 6.7 per cent from a year earlier.

"The rise in May is a signal that the economy is recovering. Hopefully,

starting from May, the national fiscal revenue would begin to show positive

growth," the newspaper quoted Jia Kang, president of the Institute of Fiscal

Science, Ministry of Finance, as saying.

Another expert from the same institute attributed the reason of May's

rise to the launch of many projects included in the 4-trillion yuan stimulus

plan.

"Though the stimulus plan was announced in November, many of projects

were actually launched in spring, and is now starting to contribute to the

economic growth," said Zhao Quanhou, a senior researcher at the institute,

told the newspaper.

Experts believe that May revenue increase gives much room for the

treasury to use more fiscal measures to bolster the economy, but there still

is huge pressure on the government to realize an 8per cent revenue growth in

2009.

"The key period is from June to October. We need to watch closely the

figures in the coming months, and see if the economy is really starting to

recover," said Zhao.

China expects to see a 8 per cent fiscal revenue growth in 2009,much

slower than previous years. Its revenue increased by 18.8 percent in 2008 and

32.4 per cent in 2007.


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