(Yicai) Feb. 19 -- Chinese administrative regions expect their fiscal revenues to expand by nearly 3 percent this year, a slower pace than 2024, as they adapt to sluggish macroeconomic conditions with bolstered government stimulus measures.

The average annual forecast shows a 2.8 percent increase in general public budget revenue, lower than last year's target of 4.4 percent, Luo Zhiheng, chief economist at Yuekai Securities, told Yicai after reviewing budget drafts from 31 regions.

Luo said that since the national target in the past decade has typically been slightly lower than regional targets, with the difference usually within one percentage point, the nationwide growth of general public budget revenue is expected to be around 2 percent this year.

The budget drafts show that regions are following the central government's directive to implement a more proactive fiscal policy this year, including increasing the fiscal deficit ratio, issuing more ultra-long-term special treasury bonds, and expanding the issuance and use of local government special bonds.

Most provinces are exercising caution in their budget plans due to insufficient demand and falling prices, Luo said. The implementation of tax incentives for the real estate industry has also led to decreased fiscal income. Additionally, some regions, especially those with high debt risks, face increasingly limited options for raising revenue by tapping into existing assets, he added.

Among the 31 regions, there are some outliers. The autonomous regions of Xinjiang and Xizang are expected to achieve growth rates of 10 percent, while the provinces of Hubei and Heilongjiang are predicted to report 5 percent increases.

However, most industrial powerhouses forecast more modest figures. Guangdong, which ranks first in revenue scale, and Shandong, which ranks fifth, both expect growth rates of 3 percent. Jiangsu, Zhejiang, and Shanghai, ranking second, third, and fourth respectively, all predict 2 percent increases.

China is expected to allow its fiscal deficit-to-gross domestic product ratio to exceed 3.5 percent or even reach 4 percent in 2025, which will help alleviate local budget pressures, Luo predicted. That compares with last year's target of a 3 percent deficit which proved a further need for consumption stimulus.

The nation is likely to increase its special debt quota to surpass CNY4.5 trillion (USD618.2 billion) this year, with proceeds available for more diverse uses, such as adding land reserves or purchasing finished buildings to convert into affordable housing, which should boost demand, Luo concluded.

Editor: Emmi Laine