China eyes record $139 bln deficit in '09 -paper

BEIJING, Feb 22 (Reuters) - China’s 2009 budget deficit will leap eightfold to 950 billion yuan ($139 billion) under a draft plan which will be put to the National People’s Congress next month, the Economic Observer newspaper reported on Sunday.

That deficit, including 200 billion yuan of loans to be issued by China’s regions, would be the biggest in China’s history and amount to around 3 percent of gross domestic product, the paper said, citing informed sources that it did not name.

The paper said the Financial and Economic Commission under the National People’s Congress has already held detailed discussions on the deficit.

Beijing ramped up spending towards the end of 2008 as the global financial crisis and a domestic property downturn weighed more heavily on the economy, dragging growth to a seven-year low of 9.0 percent.

China closed its books on 2008 with an implied public deficit of about 111 billion yuan after entering the final month sitting on a surplus of 1.2 trillion yuan. [ID:nPEK280594] ($1=6.836 Yuan)