The US bank outlines it views for China's fiscal outlook in 2024 post NPC details. It sees the augmented fiscal deficit widening this year by 0.7pp of GDP to 11.9%.

Goldman Sachs: "According to the government work report, policymakers set the official on-budget fiscal deficit target at 3.0% of GDP for 2024, planned a local government special bond (LGSB) issuance quota of RMB3.9tn, and reintroduced RMB1tn for ultra-long-term central government special bond (ULT CGSB) issuance, all of which were largely in line with market and our expectations. This implies the total amount of government bond net issuance quota will increase to RMB8.9tn in 2024 from RMB8.7tn in 2023, and if adjusted for the RMB500bn CGB proceeds raised in late 2023 for spending this year, the amount of government bond proceeds spending could be RMB9.5tn in 2024 (vs. RMB8.2tn in 2023). Premier Li Qiang also pledged to issue ULT CGSB over the next few years to raise funding for key projects in strategically important areas, which is a positive sign in our view. Despite the smaller official fiscal deficit target vs. 2023, we estimate the effective fiscal deficit will remain unchanged from 2023 at 4.6% of GDP in 2024 on more drawdown in fiscal deposits. Among off-budget financing channels, we believe the boosts from more CGSB and PSL issuance should more than offset the drags from falling land sales revenue and LGFV financing, and thus we expect our "augmented fiscal deficit" measure to widen by 0.7pp to 11.9% of GDP in 2024."