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China’s Fiscal Income Growth Cools in January / February

Growth in China’s fiscal revenue cooled to its slowest in at least a year between January and February as China’s foundering economy dampened tax collection and other key sources of government income.  Fiscal revenue rose 3.2 percent to 2.57 trillion yuan ($410.5 billion) in the first two months of the year, data from the Finance Ministry showed on Monday.

That was far less than an average 8.6 percent gain in fiscal income seen in 2014, and the slackest pace seen in at least a year.  Indeed, a breakdown of the figures showed taxes collected from the real estate sector fell 1.6 percent to 96.5 billion yuan in the first two months of the year as China’s housing industry stumbled.

China’s cooling housing sector, which accounts for about 15 percent of the Chinese gross domestic product, has been an increasing drag on the world’s second-biggest economy as a glut of unsold homes dampened home prices and property investment.  Official data showed property sales in the first two months of 2015 dropped by the most in three years as real estate investment eased.

Reuters [1]

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