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UPDATE 1 – China’s fiscal revenue growth is accelerating as the economy recovers

UPDATE 1 - China's fiscal revenue growth is accelerating as the economy recovers

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BEIJING, May 18 (Reuters) – China’s tax revenue rose 11.9% in the first four months of 2023 from the same period a year earlier, accelerating sharply after rising 0.5% in January-March, official data showed, as the economy experienced a gradual but uneven post-COVID recovery.

Fiscal revenues totaled 8.32 trillion yuan ($1.20 trillion) in the first four months, while fiscal spending rose 6.8% to 8.64 trillion yuan, the ministry said in a statement Thursday.

In April, tax revenues rose about 70% from a year earlier, a sharp acceleration after a 5.5% increase in March, according to Reuters calculations based on the ministry’s data.

The world’s second-largest economy is recovering after three years of tight COVID-19 restrictions, but April data suggested the economy lost momentum at the start of the second quarter.

Analysts expect the Chinese economy to grow nearly 8% year-on-year in the second quarter, faster than the 4.5% growth rate in the first quarter, partly because it came from a low last year when widespread COVID lockdowns were.

($1 = 6.9121 Chinese yuan renminbi) (reporting by Ellen Zhang and Kevin Yao; editing by Himani Sarkar and Sonali Paul)

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