China Shrinks Fiscal Deficit by Third Even as Economy Cools (1)

China’s budget deficit shrank by almost a third in the first half of 2023 as the government spent less and tax revenue rebounded, suggesting fiscal policy provided limited support to the faltering economy.

The broadest measure of the fiscal gap — or so-called augmented deficit — was 3.4 trillion yuan ($477 billion) in the first half of this year, down 32% from the same period in 2022, according to Bloomberg calculations based on data released by the Ministry of Finance on Wednesday.

The figures suggest little fiscal support for the economy this year even as the recovery comes under ...