(Yicai) June 3 -- Chinese local governments have issued bonds worth 163 percent more in May than in the prior month to boost fiscal policies' stimulus to the economy.

China issued CNY903.6 billion (USD124.7 billion) worth of local government bonds last month, up 20 percent from a year earlier. The central governments' bond issues tallied CNY1 trillion (USD138.1 billion).

Local governments issued CNY2.8 trillion worth of bonds in the first five months of this year, down 20 percent from a year ago, with the drop mainly due to slower issuance in the first four months.

The worth of bonds issued by the Ministry of Finance fell 8 percent last month from April, but the combined figure for the first five months reached a five-year high of CNY4.5 trillion, according to data from Sinolink Securities.

Last month, the finance ministry started work to issue CNY1 trillion worth of ultra-long special sovereign bonds this year. The first part was worth CNY80 billion (USD11 billion), with the rest to be gradually issued between this month and November.

The launch of ultra-long special government bonds with accelerated issuance of local government bonds will help ease governments' fiscal pressures and stabilize market expectations, Wen Bin, chief economist at China Minsheng Bank, told Yicai.

Around CNY830 billion worth of local government bonds will be issued this month, about the same as a year earlier, maintaining a fast pace, Wen added.

Government bond supplies will likely increase by CNY1.6 trillion from last month to this September compared with a year earlier, reaching the second-highest amount over the past five years, only behind the figure in 2020, said Zhang Yu, deputy director at Hua Chuang Securities' research institute. 

The increment mostly comes from local governments' special-purpose bonds and the ministry's ultra-long special bonds, Zhang noted. If all the bond issues' proceeds were converted to current-period spending, the growth of fiscal expenses would surge by 10.4 percentage points, Zhang pointed out. 

Editors: Dou Shicong, Martin Kadiev