Q1 fiscal revenue growth hits a three-year high; expenditure progress accelerates

Securities Times Reporter He Jueyuan

“The increase in the growth rate of fiscal revenue reflects that China’s economic operation has started strongly.” Wang Jianxun, Director of the Treasury Payment Center of the Ministry of Finance, stated at the Ministry of Finance’s press conference held on April 24 that the fiscal revenue and expenditure situation in the first quarter was good, marking a strong start.

In the first quarter of this year, China’s fiscal revenue and expenditure maintained growth, and local revenue remained stable. The latest fiscal revenue and expenditure data from the Ministry of Finance show: in the first quarter, the national general public budget revenue exceeded 6.16 trillion yuan, a year-on-year increase of 2.4%, higher than the same period in the past three years; national general public budget expenditure was 7.47 trillion yuan, an increase of 2.6%, with the fastest expenditure progress in nearly five years; local general public budget revenue increased by 2.1% year-on-year, with 80% of regions experiencing revenue growth.

As the main source of fiscal revenue, tax revenue nationwide reached 4.85 trillion yuan in the first quarter, a year-on-year increase of 2.2%, with the growth rate 2.1 percentage points higher than the previous two months. Among them, most tax types maintained growth: driven by growth in industrial service industries, narrowing declines in industrial producer prices, domestic value-added tax increased by 4.9%; strong momentum in foreign trade imports helped import goods value-added tax and consumption tax grow by 12.9%; active stock market trading and increased transaction amounts drove securities transaction stamp duty up by 78.1%.

Due to special factors, corporate income tax decreased by 5.6% in the first quarter. Wang Jianxun explained that this was mainly due to a decrease in the scale of last year’s annual tax settlement and review. He also revealed that, with profits of large-scale industrial enterprises growing well, the prepayment scale of corporate income tax in the first quarter has achieved a year-on-year increase of 4.8%.

Thanks to proactive fiscal expenditure, key areas such as people’s livelihood were well protected. In the first quarter, national general public budget expenditure reached 7.47 trillion yuan, accounting for 24.9% of the initial budget for the year. Among them, health and wellness expenditure, social security and employment expenditure, urban and rural community expenditure, and housing security expenditure increased by 12.1%, 9%, 2.8%, and 6.3%, respectively. The effort in health and wellness expenditure was significant, mainly due to the concentrated issuance of childcare subsidies and increased subsidies to basic medical insurance funds since the beginning of the year.

In the first quarter, the country issued a total of 1.1599 trillion yuan of new special bonds, an increase of 199.6 billion yuan or 20.8% compared to the same period last year. Additionally, local governments are actively promoting debt replacement work. In the first quarter, a total of 960.4 billion yuan of replacement bonds were issued nationwide, completing 48% of the annual quota of 2 trillion yuan.

The issuance of ultra-long-term special national bonds is also progressing ahead of schedule. On April 24, the Ministry of Finance successfully issued 119 billion yuan of the first batch of ultra-long-term special bonds for 2026, marking the opening of this year’s 1.3 trillion yuan of ultra-long-term special bonds. Qu Fuguo, Deputy Director of the Debt Management Department of the Ministry of Finance, emphasized that the monthly issuance scale of ultra-long-term special bonds will remain moderate and balanced, better meeting the debt repayment needs of financial institutions, and reasonably controlling financing costs.

With the launch of ultra-long-term special bonds, various fiscal policies continue to be implemented effectively. Wang Feng, Associate Professor at the China Institute of Public Finance at Shanghai University of Finance and Economics, told Securities Times that the fiscal expansion in the second quarter is expected to further intensify. The expansion will not simply replicate the approach of accelerating expenditure in the first quarter, but will involve a combination of various fiscal policy tools to maintain expenditure intensity while optimizing the structure, achieving sustainable expansion effects.

(Editors: Wang Zhiqiang HF013)

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