(Yicai) July 23 -- China's broad fiscal expenditure reached CNY18.2 trillion (USD2.7 trillion) in the first half of this year amid the country stimulating overall demand to promote economic recovery and growth, with experts expecting the figure to further increase in the second half.

The spending exceeded revenue by CNY4.6 trillion (USD679.6 billion) in the six months ended June 30 from a year earlier, according to data released by the Ministry of Finance yesterday. China's general public budget expenditures climbed 1.5 percent to a record high of CNY14.3 trillion, highlighting the implementation of a more proactive fiscal policy.

Social security and employment spending rose 7.6 percent, while that related to health and wellness jumped 10.8 percent, primarily driven by increased childcare subsidies. In contrast, agriculture, forestry, and water infrastructure expenditure fell 8.6 percent, while transportation and urban and rural community spending each fell by about 2 percent.

First-half fiscal funding shifted more from "investment in things" to "investment in people," said Luo Zhiheng, chief economist at Yuekai Securities. Healthcare, elderly care, and housing security spending have all logged increases exceeding the overall expenditure growth, Luo pointed out.

The proportion of livelihood-related spending continues to rise, effectively ensuring and improving living standards, Luo noted, adding that this not only promotes social equity but also enhances residents' willingness to consume, stabilizing economic growth through increased domestic demand.

Fiscal spending will likely significantly increase in the second half due to major project constructions entering a concentrated implementation phase, slower expenditure pace in the first half, and ample budgetary space, Luo said. Based on the annual budget of around CNY41.9 trillion, the broad fiscal expenditure will likely reach CNY23.7 trillion in the second half, marking a substantial year-on-year growth, Luo stressed.

Since last month, there has been an acceleration in the issuance of local government bonds, while the rollout of ultra-long-term special government bonds is underway, said Yuan Haixia, director of China Chengxin International Credit Rating's research institute. Along with the requirements for counter-cyclical adjustments, the fiscal expenditure growth is expected to rebound in the second half, further supporting infrastructure investment and the real economy, Yuan added.

According to several experts, incremental policy tools such as revitalizing the quota of special bond balances and issuing additional ultra-long-term special government bonds could also be considered if the economic situation necessitates it.

On the income side, the national general public budget revenue rose 4.7 percent to CNY12.1 trillion in the first half from a year earlier. Tax revenue jumped 5.3 percent to CNY9.8 trillion, driven by the recovery of prices, active capital market transactions, and trade related to artificial intelligence.

However, due to the sluggish real estate market, revenue from the transfer of state-owned land use rights plunged 32 percent, with both deed and land appreciation taxes seeing double-digit percentage drops.

Editor: Martin Kadiev