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This issue provides an overview of the macroeconomic trends in Q4 2022, some policy updates and hot topic analysis.
Here are some macro-economic highlights:
Growth of aggregate financing to the real economy increased by 9.6% in 2022
The last impacts of COVID-19 controls in 2022 significantly curbed macroeconomic development. In this context, the People’s Bank of China (PBoC) implemented a package of policies to stabilise the economy in a bid to effectively support the real economy and achieve market stabilisation. In 2023, the PBoC is expected to maintain its relatively loose monetary policy to support economic recovery.
Fiscal revenue increased by 0.6% while fiscal spending grew by 6.1%
In 2022, fiscal revenue dropped by 0.6% YoY to 20.37 trillion yuan. According to the Ministry of Finance, this was a result of slower growth mainly caused by COVID-19 control measures. Meanwhile, national public budget expenditure reached 26.06 trillion yuan with a 6.1% YoY growth in 2022.
With the COVID-19 pandemic impacting China head-on, the country’s total retail sales of consumer goods reduced by 0.2% YoY in 2022. It is the lowest figure in recent years following the 3.9% contraction in 2020. However, China is still the world’s second largest consumer market with a market size of almost 44 trillion yuan, and the largest online retail marketplace. Although the contribution of final consumption expenditure to GDP growth dropped to 32.8% in 2022, consumption is expected to regain its status as a critical driver of China’s economic growth in 2023 and the future.
The COVID-19 disruption over the past three years significantly influenced consumption:
China Tax Lead Partner, Central China Markets Leader, Shanghai Office Lead Partner, PwC China
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