BEIJING, Dec 8: China is considering increasing the 2009 fiscal deficit by 56 per cent to help maintain growth amid the deepening global economic crisis, state media said.

The finance ministry has \proposed raising the fiscal deficit next year to 280 billion yuan ($40.7bn), the China Business newspaper reported over the weekend, citing an unnamed source close to the ministry.

Finance Minister Xie Xuren had said early this year that China’s 2008 fiscal deficit would be kept below 180 billion yuan.

China’s top leaders were due to discuss the increased deficit proposal at a key annual economic conference that began on Monday and concludes on Wednesday, the report said.

The proposal to increase the fiscal deficit came after China announced a four-trillion-yuan stimulus package last month to spur growth by driving up domestic consumption in the face of flagging exports.

China’s economic growth slowed to nine per cent in the third quarter, the lowest in five years.

The World Bank has forecast growth will drop further to a 19-year low of 7.5 per cent in 2009, well down from 11.9 per cent last year.

The report did not specify how the increased deficit would be used.

The increase in next year’s fiscal deficit is expected to add pressure to the government’s balance sheet as growth in fiscal revenue next year is predicted to slow down to 20 per cent from 24 per cent this year, the paper said. —AFP