Finance Ministry: China to increase fiscal deficit in 2025

China's fiscal policy for 2025 will see significant changes, with an increased fiscal deficit and expanded use of special bonds to stimulate the economy, officials announced at a series of press briefings Friday on the country's high-quality economic development.

Lin Zechang, director general of the Comprehensive Department of the Ministry of Finance, revealed that within the quota of new special bonds to be issued in 2025, local governments would be allowed to make arrangements for land use as needed.

These arrangements will include two special bond projects: The reservation of land and the purchase of existing commercial housing to be repurposed as affordable housing. Lin said the policy's effects will gradually unfold throughout 2025.

Meanwhile, China's fiscal deficit will rise significantly in 2025, Liao Min, vice minister of finance, said at the same press conference.

Liao highlighted that, in line with China's growing GDP, total fiscal expenditure will increase, with countercyclical measures intensified to support the economy's ongoing recovery.

He emphasized that the fiscal policy for 2025 is clearly defined, proactive, and focused on strengthening countercyclical adjustments.

At the same time, the policy will ensure medium and long-term fiscal sustainability, maintaining a prudent approach, Liao added.

Specific policy measures will be launched after completing the necessary statutory procedures, the vice minister noted.

(Cover via CFP)