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Fiscal Vulnerabilities and Risks from Local Government Finance in China
Author:
Ms. Yuanyan S Zhang
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Mr. Steven A Barnett
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Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 004
Language:
English
Publication Date:
14 Jan 2014
DOI:
https://doi.org/10.5089/9781484349953.001
ISBN:
9781484349953
ISSN:
1018-5941
Pages:
29
Keywords:
WP; IMF staff estimate; debt stock; fiscal deficit; balance sheet; bank loan; government debt; net proceeds; Fiscal Vulnerabilities; Fiscal Risks; Local Government Finance; China; Land Finance; Gross Financing Needs; Debt sustainability; LGFV debt; debt shock; local government; maturing debt; debt issuance; debt estimate; government debt stock; SOE debt; augmented fiscal deficit; Government debt management; Infrastructure; Contingent liabilities; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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China weathered the global financial crisis better than most, thanks to a large and timely stimulus. This stimulus, however, was mainly in the form of off-budget infrastructure spending and thus not visible in the headline fiscal data. We construct a time series for the augmented fiscal deficit and debt—augmented to include off-budget activity—that better illustrates the counter-cyclical role of fiscal policy. The results also show that the augmented fiscal deficit and debt are both considerably higher than the headline government data suggest. Nonetheless, at around 45 percent of GDP, the augmented debt is still at a manageable level.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund