China may need to set a budget deficit target at above 3% of gross domestic product next year, as the country strives to improve its economic performance, former Finance Minister Lou Jiwei said.
(Bloomberg) — China may need to set a budget deficit target at above 3% of gross domestic product next year, as the country strives to improve its economic performance, former Finance Minister Lou Jiwei said.
Fiscal policy should continue to focus on cutting taxes and fees, Lou said on Sunday at the China Wealth Management 50 Forum, according to a report in the China Securities Journal.
A deficit ratio of above 3% would be higher than the target of 2.8% set for this year.
He also suggested increasing the quota for local governments to issue special bonds. Part of that could still be used to cut the outstanding implicit debt of local governments, said Lou, who stepped down as finance minister in 2016.
Lou said raising the deficit ratio of central and local governments is a better option than selling special sovereign bonds.
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