1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - The fiscal situation in 2025 presents challenges that will continue into 2026. Greater fiscal expansion is needed to ensure the effectiveness of the fiscal policy. If government bond supply does not significantly exceed expectations, fiscal revenue and expenditure in 2026 are expected to remain under pressure [1][5][25] 3. Summary by Related Catalog Fiscal Revenue in 2025 - Fiscal revenue growth was -1.7% in 2025, still lower than the budgeted 0.1%, indicating continued pressure on fiscal revenue. Non-tax revenue growth slowed down, with a year-on-year decline of 11.3%, while tax revenue growth increased by 0.8% year-on-year. Some taxes, such as personal income tax (up 11.5% year-on-year) and stamp duty (up 24.6% year-on-year), showed significant growth, but whether this high growth can continue in 2026 remains to be seen. Some tax growth may improve in 2026. Export tax rebates and value-added and consumption taxes on imported goods dragged down the tax growth rate in 2025 by -1.2% and -0.5% respectively, but these are expected to improve in 2026. Government fund revenue continued to face pressure, with an actual growth rate of -7.0% in 2025 [2] - The overall revenue of the first and second accounts fell short of expectations in 2025. The budgeted growth rate of fiscal revenue was 0.1%, while the actual growth rate was -1.7%. The budgeted growth rate of government fund revenue was 0.7%, and the actual growth rate was -7.0% [8] Fiscal Expenditure in 2025 - The fiscal expenditure rhythm was slow, and the growth rate was lower than the budget. The actual growth rate of fiscal expenditure was 1.0%, compared with the budgeted 4.4%. The actual growth rate of government fund expenditure was 11.3%, compared with the budgeted 23.1% [3] - The pressure of rigid expenditure increased, and the growth rate of infrastructure expenditure slowed down significantly. The overall fiscal expenditure increased by 1.0% year-on-year, while social, scientific, cultural, and educational expenditures increased by 4.5% year-on-year, and debt interest payments increased by 4.8% year-on-year, both significantly higher than the overall fiscal expenditure growth rate. Infrastructure expenditure decreased by 6.6% year-on-year [3] - The actual deficit increased moderately, and the scale of carry - over and surplus funds changed little compared with the previous year. The actual fiscal deficit in 2025 was 7.14 trillion yuan, accounting for 5.1% of GDP, with the actual deficit rate increasing by 0.3 percentage points compared with the previous year, significantly lower than the increase in the budgeted deficit rate from 3% to 4%. The estimated balance of the first account was about 580.5 billion yuan, with a small increase compared with previous years. The balance of the second account was about 683.0 billion yuan, a slight decrease from 962.0 billion yuan in the same period last year [4] Outlook for 2026 - Fiscal challenges remain in 2026, and greater fiscal expansion is needed to ensure the effectiveness of the overall fiscal policy. If the budgeted deficit rate in 2026 is 4%, with about 2 trillion yuan in special treasury bonds and 4.5 trillion yuan in special bonds, and assuming an additional 50 billion yuan in special treasury bonds for capital replenishment, the expected increase in government bonds this year is 1 trillion yuan, a decrease from 2.9 trillion yuan in 2025, which will limit the scope of fiscal policy implementation in 2026 [5]