China likely to increase fiscal spending further

China's fiscal spending expanded by 18.1% y/y YTD in October. Whereas, it stood at 8.2% growth for the whole year of 2014. Meanwhile, the fiscal revenue dropped to 7.7% y/y YTD in October, which was 8.6% last year. 

The wider gap between fiscal spending and revenue showss that the fiscal deficit for 2015 is expected to go beyond the target of 2.3% of GDP, says Commerzbank. 

Recently, China's deputy finance minister said that China is going to review its fiscal deficit anf it will be adjusted at the warning levels of 3 percent to GDP. 

"This clearly signals that China will expand the fiscal spending aggressively in the coming quarters to boost economic growth. In addition, an expansion in fiscal policy indicates further easing in monetary policy, which suggests that China will allow more weakness in CNY", states Commerzbank.