Govt plans small cut in budget deficit
(Shenzhen Daily/Agencies)
Updated: 2005-12-08 09:34

The government plans to trim its budget deficit by about 1.7 percent to 295 billion yuan (US$36.5 billion) in 2006 while continuing to wind down infrastructure spending, the China Securities Journal said yesterday.

The planned cut, if approved, would be much smaller than this year’s 6 percent reduction from 2004, which helped bring down the government deficit to 300 billion yuan, or just over 2 percent of gross domestic product.

“The Central Government deficit will be reduced by 5 billion yuan next year from this year’s level,” the newspaper said, citing unnamed government officials.

Chinese leaders have pledged to redirect spending from roads and airports to social security to encourage consumption under a shift in long-term strategy to help tilt economic growth from an over-reliance on investment and exports.

The government would cut the size of special bonds to finance infrastructure projects to 60 billion yuan in 2006 from 80 billion yuan this year, the newspaper said.