China first-half fiscal surplus at $193 billion

Meanwhile, we fall deeper and deeper......

(Reuters) - China posted a fiscal surplus of 1.25 trillion yuan ($193.3 billion) in the first half of the year as steady economic growth and rising prices lifted government revenues, the Ministry of Finance said on Thursday.

The surplus, equal to about 6.1 percent of China's gross domestic product from January to June, is well above Beijing's target for a full-year fiscal deficit of 2 percent of GDP.

That said, Beijing normally accumulates a fiscal surplus in the first three quarters of a year before accelerating spending at year-end to pull the annual budget into the red.

National fiscal revenues in June rose 28 percent from a year ago to 1.01 trillion yuan, compared with May's 34 percent increase and April's 27 percent gain.

For the first six months of the year, revenues rose 31 percent to 5.69 trillion yuan compared with the same period in 2010; spending also climbed 31 percent to 4.4 trillion yuan from a year earlier.

The ministry attributed the fast growth in revenues to the economy's sound performance in the first-half of the year, rising producer and consumer prices, import taxes carried over from last year, and the inclusion of some off-budget items.

But it noted revenue growth could ease in coming months as the economic growth gently slows and as China reforms its income tax system.

National fiscal expenditures in June rose 33 percent from a year earlier to 1.08 trillion yuan, the ministry said.

$1 = 6.468 yuan ($1 = 6.468 Chinese Yuan)