CICC: Debt swap alleviates local debt burden, next year's fiscal deficit rate is expected to be significantly higher than this year

Jinshi Data News on November 9th, CICC believes that a one-time increase in the quota for debt-to-bond swaps can alleviate the burden of local government debt, and the expected fiscal deficit ratio next year is significantly higher than this year. In addition to saving Interest, debt-to-bond swaps will also release incremental fiscal expenditure space. Assuming that 6 trillion yuan of new replacement bonds and 2 trillion yuan of shanty town renovation bonds that do not need to be repaid in advance can reduce the squeeze on fiscal revenue and operating debt originally used for other expenses by 50%, it is estimated that a fiscal space of 3.78 trillion yuan can be released in the next three years, and a fiscal space of 1.26 trillion yuan can be released in the next year, which is equivalent to 0.86% of GDP in 2024.