BEIJING, (Reuters) – China’s fiscal spending increased 7.0% between January and February compared to a year ago, according to the finance ministry. This is a significant improvement from the 0.3% increase in 2021, as policymakers intensify support for the slowing economic growth.

The ministry reported that fiscal spending reached 3.8 trillion Yuan (597 billion dollars) during the first 2 months of 2022. This includes 180 billion yuan for transport, and 79 billion on energy conservation, environmental protection and transportation.

Chinese officials have promised to increase their fiscal spending in order to offset a slowdown at the second-largest country, despite having a smaller budget deficit.

The ministry stated that China’s fiscal revenue rose by 10.5% to 4.6 trillion Yuan in the first 2 months of 2022, compared with a year ago. This is a slight decrease from the 10.7% increase in 2021.

According to the ministry, revenue from value added tax increased 6.1% between January and February to 1.48 trillion Yuan. Incomes from corporate income taxes increased 5.4% to 912.7 million yuan.

China is increasing infrastructure investments, mostly through local government special bonds. This comes under an annual quota at 3.65 trillion Yuan.

($1 = 6.3619 renminbi)