(Original title: Fiscal funds have sufficient space for cross-cycle use, and the deficit rate is expected to decline this year)
|Note: The deficit rate in 2018 was appropriately reduced with the growth of GDP.|
Securities Times reporter He Jueyuan
A few days ago, the official website of the Ministry of Finance released an excerpt of the speech delivered by Liu Kun, Secretary of the Party Leadership Group and Minister of the Ministry of Finance, at the National Financial Work Conference. While requiring the proactive fiscal policy in 2022 to “maintain appropriate spending intensity and improve spending accuracy”, Liu Kun further proposed that the fiscal deficit should be kept at a reasonable level and the scale of fiscal spending should be expanded.
A number of experts interviewed by Securities Times reporters believe that in the past two years, there has been a large balance of fiscal funds, which provides space for the use of fiscal funds across cycles. will remain stable. On the other hand, maintaining the intensity also requires the government to improve the efficiency of the use of funds, such as revitalizing stock assets and optimizing the structure of fiscal expenditures, which will become an important starting point for expanding the scale of fiscal expenditures.
Fiscal space is not shrinking
In 2022, my country’s economic development is facing triple pressures, and the demand for fiscal efforts to stabilize growth will increase. The Ministry of Finance has made it clear that it will “guarantee the intensity of fiscal expenditures and accelerate the progress of expenditures.” Liu Kun also further explained that this year’s fiscal deficit should be kept at a reasonable level and the scale of fiscal expenditure should be expanded.
“Under the requirements of the stable growth policy and the active effectiveness of monetary policy is being tested after the expected weakening, active fiscal efforts are more important.” Tao Jin, deputy director of the Macro Department of Suning Financial Research Institute, told the Securities Times reporter It is necessary to expand fiscal expenditure this year, and the fiscal deficit rate is expected to remain at a relatively high level of around 3%.
For a long time, institutions and academic circles often use 3% as the “red line” when discussing the fiscal deficit rate. Before 2020, my country’s fiscal deficit rate will be basically controlled below 3%. By 2020, the proactive fiscal policy will be more active and promising. The Ministry of Finance will raise the deficit rate to over 3.6%, and the deficit scale will increase by 1 trillion yuan from 2.76 trillion yuan in 2019. In 2021, taking into account the effective control of the epidemic and the gradual recovery of the economy, the financial department will reduce the deficit rate to about 3.2% in accordance with the requirements of a proactive fiscal policy to be “more sustainable”, with a deficit of 3.57 trillion yuan.
After entering 2022, due to the triple pressure on economic development, the financial department has made it clear that it will expand the scale of fiscal expenditure. As for the level of the fiscal deficit rate, many experts believe that this year’s “more sustainable” requirements and maintaining a higher transfer rate Under the funding, the fiscal deficit rate lacks the need to further increase, and there is a high probability that it will be lowered.
“From the perspective of sustainability and risk prevention, the deficit rate of 3% is an important international security red line. As the domestic economy gradually returns to normal, the probability of the fiscal deficit rate returning to 3% or even breaking 3% is high.” Chief Caixin Securities Economist Wu Chaoming predicts that the fiscal deficit rate will be lowered to about 2.8% to 3% this year, which is basically the same as the level in 2019.
In Wu Chaoming’s view, the reduction of the fiscal deficit rate does not mean the shrinking of the fiscal space. On the contrary, the unused budgetary fiscal deficit funds in the previous two years can be adjusted through the central budget stabilization fund, local finance transfer funds and carryover balances. Waiting for the fund account to be carried forward to use in 2022, which will form a strong support for actual expenditure.
Li Qilin, Director and Chief Economist of Hongta Securities Research Institute, also said that the high government deposits give more space for this year’s finances, that is, when the fiscal deficit rate is not enough to support economic growth, the finance may use the surplus funds carried over from previous years. Or transfer funds to expand the scale of fiscal spending.
Ensuring expenditure intensity also needs to improve efficiency
For expanding the scale of fiscal expenditure, some experts and scholars suggest that “special national debt” can be issued again in 2022, which can expand fiscal expenditure without being included in the fiscal deficit.
The co-chief economist of CITIC Securities clearly pointed out that special treasury bonds have the characteristics of special funds, flexible uses, and not included in the fiscal deficit. Considering that a total of about 950 billion yuan of treasury bonds will expire this year, and special treasury bonds will be issued under the background of stable growth. It can further strengthen the “counter-cyclical” adjustment when it is used for infrastructure to make up for shortcomings. It can open up finances while “reducing taxes and fees”, and can also reduce the economic disturbance caused by the epidemic. In 2022, there is the possibility of issuing special treasury bonds.
However, Tao Jin believes that the issuance of special treasury bonds three times in history has a special background. At present, my country’s fiscal policy has a large space and there are many types of policy tools. If it is only to solve the problems of economic growth and economic cycle this year, it seems that there is no need to issue it. Special treasury bonds are also not conducive to market expectations.
It is worth noting that this year, the financial department has also requested to improve the precision of spending while emphasizing on maintaining the intensity of spending. A number of experts told reporters that in addition to public financial expenditures involving the level of the fiscal deficit rate, this year’s “expansion of fiscal expenditures” also includes national government fund expenditures, including expenditures for new special bonds. While the overall scale of fiscal expenditure has increased, it is also necessary to ensure the intensity of expenditure by improving efficiency.
At present, the issuance of new special bonds in 2022 has already started, and under the general tone of moderate policy efforts, the general view is that the rhythm of the issuance of special bonds in various places will be significantly advanced, so as to form a physical workload as soon as possible, and the issuance scale or would be flat or slightly lower than last year. Although it is difficult to increase the scale of issuance, there are about 1.2 trillion yuan of special bonds issued in the fourth quarter of 2021 to supplement the scale of special bonds this year.
While proposing to grasp the scale of fiscal expenditure, Liu Kun also requested that the expenditure structure should be vigorously optimized, focusing on supporting scientific and technological research, ecological environmental protection, basic people’s livelihood, major regional strategies, modern agriculture and major projects in the national “14th Five-Year Plan”. Improve the direct access mechanism for financial funds, strengthen the filing and review of distribution plans, improve the direct fund supervision system, and promote the standardized, efficient and safe use of financial funds.
Wu Chaoming believes that, on the whole, this year’s requirement to “expand the scale of fiscal expenditure while maintaining a reasonable level of fiscal deficit” has two meanings. First, from 2020 to 2021, the fiscal year “excessive revenue and underexpenditure” for two consecutive years provides space for the cross-cycle use of fiscal funds, and maintains the scale of the new fiscal deficit and special debt to ensure the stability of the fiscal expenditure scale. The second is to improve the use efficiency of fiscal funds, such as revitalizing stock assets and optimizing the structure of fiscal expenditures, which can provide space for active fiscal efforts and become an important starting point for expanding the scale of fiscal expenditures.