LOCAL governments in China will suffer an “interim impact” on fiscal revenue and expenditure from the virus epidemic that the country has so far allocated 99.5 billion yuan (US$14.16 billion) to fight, a finance ministry official said yesterday.

The Central Government will increase the amount and speed of transfer payments to local governments to help alleviate the pressure, Assistant Finance Minister Ou Wenhan told a news conference in Beijing.

Chinese regional and local governments could see contractions in their 2020 revenue growth, with added pressure from health-care spending and subsidies for virus-struck firms, analysts from Moody’s said last week.

But the regional governments “currently most affected by the outbreak have stronger financial profiles,” they said. Local financial departments are stabilizing fiscal operations by “vigorously reducing general expenditures and doing everything possible to raise funds,” Ou said.

Expenditure on virus prevention and control work should be prioritized, he said.

China is expected to keep fiscal stimulus on track in the near term to stabilize growth. On Saturday, Beijing announced investment projects involving 252.3 billion yuan (US$36 billion) this year, focusing on infrastructure and housing.(SD-Agencies)