China’s FinMin Says Government is Expanding Deficit to Support Growth

China’s finance minister says Beijing is expanding deficit spending to prevent a slide in growth and support its efforts to overhaul its cooling economy.

Lou Jiwei said Monday the deficit target of 3 percent of gross domestic product, up from last year’s 2.3 percent, was in line with Communist Party plans to nurture slower, more self-sustaining growth.

At a news conference, Lou said the deficit was widening “because we don’t want to see a decrease in economic growth.”

On Saturday, the Chinese leadership lowered its growth target for the world’s second-largest economy to 6.5 to 7 percent from last year’s level of “about 7 percent.”

The ruling Communist Party has said that is the minimum required to achieve its goals for raising incomes.

via Mainichi

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza