China’s fiscal revenue rose slower in August amid tax cut measures and weaker economic dynamics, official data showed. Experts expected fiscal revenue to rebound this year after stimulus policies take effect.

The country’s total fiscal revenue increased at a slower speed of 4 percent year-on-year to reach 1.11 trillion yuan ($161 billion) in August, dragging the overall fiscal revenue growth in the January-August period down to 9.4 percent, according to a statement published by the Ministry of Finance on Sept 12.

Before August, China had registered double-digit growth in aggregate fiscal revenue from January, data showed.

The slowing growth can be partly attributed to the government’s measures to cut taxes, the largest contributor to fiscal revenue, said Hu Yijian, a professor at Shanghai University of Finance and Economics.

In August, tax income expanded by 6.7 percent year-on-year, slowing from 11.4 percent in July and 14 percent in the January-July period.

China has continued to cut taxes to ease tax burdens on enterprises and individuals this year to boost the economy. New measures include cutting value-added tax by 1 percentage point, which came into effect in May, and raising the personal income tax threshold to 5,000 yuan from 3,500 yuan, which is set to come into force on Oct 1.

“Besides tax cut measures, internal and external factors have affected China’s economic growth, leading to a slower growth in fiscal revenue,” said Zeng Kanghua, a professor with the Central University of Finance and Economics.

Ongoing economic structural adjustments, consumers’ weakening confidence in the economic outlook and the slower expansion of exports amid China-US trade tensions have negatively affected the dynamics of the real economy and tax income, he explained.

Zeng expected the growth in tax income to continue to slow for a short period but to rebound to a reasonable level as the nation’s economic stimulus measures are expected to take effect. “October may see a rally in tax income,” he said.

According to Zeng, there is a time lag between the implementation of ongoing stimulus measures, such as the boost in infrastructure investment, and their effects reflected by improving economic data.

Hu from the Central University of Finance and Economics said that short-term factors, including the further impact of tax cuts, trade tension with the US, and economic growth pressure may weigh on fiscal revenue growth.

China’s fiscal spending registered a 3.3 percent increase year-on-year in August, official data showed. In the first eight months, fiscal spending expanded 6.9 percent year-on-year to 14.1 trillion yuan.