China urges faster local government spending to support economy

BEIJING (Reuters) - China's local governments must quicken spending to help reduce the size of unspent budget funds and support the economy that faces downward pressure, the Ministry of Finance said on Monday.

The comment came after data showed China's fiscal expenditures in April rose 4.5 percent from a year earlier, slowing sharply from a 20.1 percent jump in March.

The government has pledged to ramp up fiscal support this year, boosting the fiscal deficit to 3 percent of gross domestic product (GDP), after economic growth last year cooled to a 25-year low.

"We must continue to implement a pro-active fiscal policy as the downward pressure on the economy remains relatively big," the ministry said in a statement published on its website.

Local governments must speed up spending to reduce the size of unspent local government budget funds, it said.

Some local governments are complaining about funding shortfalls, but they are slow in disbursing fiscal funds, the ministry said.

The ministry took back 365.8 billion yuan ($55.83 billion) in fiscal funds that were unspent as of the end of November, it has said.

China's investment, factory output and retail sales all grew more slowly than expected in April, damping hopes that the economy is stabilising after strong March data.

($1 = 6.5519 Chinese yuan)

(Reporting By Beijing Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong)