China’s Budget Deficit Shrinks Dramatically in Sign of Fiscal Caution

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China’s total budget deficit last year was the widest since at least 2012 as the costs of pandemic restrictions soared and as revenues slumped

(Bloomberg) — China’s budget deficit shrank by more than a third so far this year, a sign of Beijing’s cautious fiscal policy despite the economy’s slowdown and a worsening housing slump.

The broadest measure of the fiscal gap — the so-called augmented deficit — was 3.3 trillion yuan ($449 billion) in the first seven months of this year, down 37% from the same period in 2022, according to Bloomberg calculations based on data released Monday by the Ministry of Finance. Total revenue rose 6%, while spending was down 4.8%.