BEIJING (Reuters) – China can raise its budget deficit ratio next year to support economic recovery because there is still room for the central government to issue more debt, Wang Yiming, a policy adviser to China’s central bank, said on Friday. .
“In the short term, we need to increase the intensity of fiscal policy,” Wang, a member of the People’s Bank of China’s Monetary Policy Committee, said at the Caixin Summit in Beijing.
“The central government’s leverage ratio is relatively low and there is still a lot of room.”
He said a higher budget deficit next year would help drive the country’s economic recovery.
Last month, China sharply raised its 2023 budget deficit to about 3.8% of GDP from 3% due to the planned issuance of sovereign bonds worth 1 trillion yuan ($137.14 billion).
Wang said China is capable of achieving economic growth of just over 5% this year. The government has set an annual growth target of about 5% for 2023.
Wang said weak external demand and insufficient domestic demand are adding to China’s spare capacity pressure.
($1 = 7.2918 Chinese yuan)
(Reporting by Ellen Zhang and Kevin Yao; Preparing by Gabriel for the Arabic Bulletin) Editing by Christopher Cushing and Christian Schmollinger
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