(Yicai) July 16 -- Issuing more government bonds in the second half of this year has become necessary after China's economic growth slowed last quarter, according to experts.

China's gross domestic product expanded 4.7 percent in the three months ended June 30, compared with 5.3 percent in the first quarter, due to impacts from extreme weather, heavy rainfall, and floods, according to data released by the National Bureau of Statistics yesterday.

The slower GDP growth has led to increased policy discussion regarding issuing more government bonds.

The economic data in the first half of this year showed that the foundation for post-pandemic economic recovery was not solid enough, and the government should consolidate and strengthen it via more proactive fiscal policies, said Luo Zhiheng, chief economist at Yuekai Securities.

The government should issue additional government bonds to compensate for the lack of expenditure caused by the fall in income from transfers of land use rights and low tax revenue growth to play the role of fiscal anti-cyclical adjustment, Luo noted.

Government spending fell 2.2 percent in the first five months from a year earlier, while the government expenditure budget fell 19.3 percent, lower than the level of previous years, said Yuan Haixia, executive director at China Chengxin International Credit Rating's research institute.

The issuance of government bonds, especially ultralong and special-purpose bonds, should be sped up and the efficacy of using the proceeds should also be increased, she added.

The government should adjust the budget promptly to increase the deficit amid insufficient expectations, confidence, consumption, and private investment from residents and firms, Lou Jiwei, former finance minister, said at a recent professional forum. The national fiscal deficit rate should be increased by over 3 percentage points from the current ceiling of 3 percent, adding more than CNY4 trillion (USD550.5 billion), with some of this used to subsidize low and medium-income households and ease local financial difficulties, Lou pointed out.

Local governments can also increase their deficit by about CNY1 trillion to pay off business arrears and boost business confidence, Lou noted.

The central government should frontload some of next year's special government and local government bond quota to prepare for 2025's special government bond projects, according to Ma Guangrong, deputy director of Renmin University's Institute of Public Finance and Taxation.

Editors: Zhang Yuhsuo, Martin Kadiev