Fiscal Revenue Posts Modest Growth in First Two Months, Expenditures in Key Areas Continue to Gain Momentum

Source: Economic Information Daily Author: Wei Xiayi

Data from the Ministry of Finance on March 19 shows that in the first two months of this year, fiscal operations started smoothly. Among them, the national general public budget revenue reached 4.4154 trillion yuan, a year-on-year increase of 0.7%. Active fiscal policies took early action, with national general public budget expenditure totaling 4.6706 trillion yuan, up 3.6% year-on-year, and key sector spending continuously well supported.

“From January to February, national fiscal revenue’s resilience and expenditure precision achieved an organic combination. The national general public budget revenue saw slight growth amid complex conditions, with steady tax revenue aligned with economic development trends; fiscal expenditure was proactive, with optimized structure, strong support for key areas like people’s livelihood, and effective implementation of active fiscal policies, laying a foundation for the year’s fiscal operation and high-quality economic development, aligning with the ‘14th Five-Year’ opening guidance,” said Li Xuhong, Vice President of Beijing National Accounting Institute.

Specifically, in January and February, the national tax revenue was 3.6393 trillion yuan, a slight increase of 0.1% year-on-year; non-tax revenue was 776.1 billion yuan, up 3.4%. Looking at central and local levels, the central general public budget revenue was 1.9167 trillion yuan, down 1.7% year-on-year; local general public budget revenue was 2.4987 trillion yuan, up 2.6%.

The performance of national tax revenue in the first two months generally matches the overall stable economic trend, with major tax categories also reflecting sector development. In terms of tax types, domestic value-added tax increased by 4.7%, mainly driven by growth in industrial service sectors and narrower declines in producer prices.

Notably, benefiting from rapid growth in foreign trade imports at the beginning of the year, import value-added tax and consumption tax increased by 12.9%; export VAT and consumption tax refunds totaled 556.9 billion yuan, a rebound of 49.4 billion yuan from the previous period, up 9.7%, strongly supporting export growth. Additionally, driven by sustained active performance in the capital markets, securities transaction stamp duty increased by 1.1 times in January and February.

“The tax effects of industrial upgrading are also becoming evident,” Li Xuhong said. Among them, tax performance in industries such as equipment manufacturing and modern services continues to be strong. For example, tax revenue from computer and communication equipment manufacturing increased by 9%, electrical machinery manufacturing increased by 9.5%, scientific research and technical services increased by 15.8%, and cultural, sports, and entertainment industries increased by 9.8%.

On the expenditure side, in the first two months, active fiscal policies took early action, with national general public budget expenditure reaching 4.6706 trillion yuan, up 3.6%. Key expenditure categories include social security and employment at 927.9 billion yuan, up 8.6%; health and wellness at 411.9 billion yuan, up 17.3%; energy conservation and environmental protection at 83.8 billion yuan, up 5.4%; and urban and rural community expenditures at 369 billion yuan, up 7.7%. According to Li Xuhong, the significant growth in social security, employment, and health expenditures not only focuses on people’s well-being but also considers green development and urban-rural construction, aligning with the fiscal priority guarantee orientation for 2026.

Ruo Ziheng, Chief Economist of Yuekai Securities, stated that the future major direction for optimizing fiscal expenditure structure is shifting from emphasizing investment to balancing investment and consumption, from emphasizing supply to balancing supply and demand, and from focusing on enterprises to including households and ensuring people’s livelihood, further tilting towards residents and social security.

(Edited by: Wen Jing)