China to increase budget deficit in 2016 -More Fiscal Stimulus ?

China Daily reports that fiscal policy in China will become ‘more forceful’ in 2016

An official statement (issued after a national fiscal work conference) from China says

  • China will increase its budget deficit next year
  • Will gradually raise its fiscal deficit ratio
  • Increase government debt issuance and set a limit for newly increased local government debt
  • Will continue to cut taxes

Expectations are that the budget deficit will rise to 3% of GDP

  • Compared with 2.3% for 2015
  • And 2.1% in 2014-

Note – the official statement the China Daily is reporting on was out on Monday, and its impact may well have already flowed through to the AUD, which was up during European and US trade overnight.