China’s fiscal revenue rebounded in March, after declining in January-February, as the nation saw its economic activity recover following the government rescinding of strict Covid-19 rules. However the finance ministry was quick to warn that it expects to see revenue growth slow in the second half of the year.

Over the first three months of 2023, fiscal revenue increased 0.5% compared to the same period one year prior, as Fiscal expenditure increased 6.8% for the year.

Month by month, fiscal revenue increased 5.5% in March, following a 1.2% decline in January-February, according to calculations by Reuters, based on the ministry’s data.

China’s economy expanded faster than analysts had expected in the first quarter of the year, as consumers emerged from economy-crushing pandemic disruptions. First quarter Gross Domestic Product (GDP) rose by 4.5%, although the headwinds building due to a coming global economic slowdown indicate the road ahead will not be conducive to such continued growth.

At a news conference, officials from the finance ministry said, “China’s economic rebound provides fundamental support for fiscal revenue growth, and the fiscal revenue growth will slow down in the second half of the year.”

The ministry pledged that in the second half of the year, they would approve budgets in a timely manner, increase and facilitate the use of special local government bonds, and try to offer more flexible treatments of taxes and fees to facilitate business.