China Will Reduce Budget Deficit for the First Time in 6 Years
China will reduce the budget deficit target for the first time in six years. Budget deficit of China will be 2.38 trillion yuan (380 billion dollars) in 2018, or about 2.6% of GDP, the draft budget says. In annual terms, the budget deficit will be reduced by 0.4%, but at the same time the growth of domestic investments is planned. The Chinese authorities also planned that the budget deficit will also be 2.38 trillion yuan or 3% of GDP in 2017.
The Chinese government expects GDP to be at least 6.5% in 2018, as it was a year ago. At the same time, following the results of 2017, China's GDP growth rates accelerated and exceeded the government's forecast and experts' expectations, reaching 6.9%. The authorities also said that this year will create more than 11 million jobs, and the level of unemployment can grow to 4.5% against 3.9% last year.
It is expected, that inflation will be 3% this year, which in general coincides with the expectations of last year. However, the results of the year were significantly lower than the government's forecast, inflation was only 1.6%. China will continue to adhere to active fiscal policy and restrained monetary policy this year. The Chinese authorities intend to maintain the exchange rate of the national currency at a stable level in 2018.
State investment will continue to play a leading role in 2018,and from the central budget for this year will be allocated 537.6 billion yuan (85 billion dollars), which is 30 billion yuan (5 billion dollars) more than last year.