March 5, 2019 / 12:29 AM / 6 months ago

China raises budget deficit to 2.8 percent of GDP: policy report

A military band member rehearses for the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China, March 5, 2019. REUTERS/Jason Lee

BEIJING (Reuters) - China set a 2019 budget deficit target that’s higher than last year’s ratio and said its fiscal policy would be more “proactive and effective”.

The Ministry of Finance said on Tuesday that it is targeting a budget deficit of 2.8 percent of gross domestic product (GDP) for this year, compared with 2018’s 2.6 percent target.

Investors are watching for signs of government policy easing to revive slowing growth amid a trade war with the United States.

Policymakers have pledged to step up support for the cooling economy this year, following a raft of measures in 2018 including fast-tracked infrastructure projects and cuts in banks’ reserve requirements and taxes.

Reporting by Zhang Min and Lusha Zhang; Writing by Yawen Chen; Editing by Sam Holmes

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