BEIJING: China’s local governments issued a net 264.7 billion yuan ($37.3 billion) in special bonds in April, the finance ministry said on Wednesday, almost half the value issued the month before, as local government finances continue to strain under pressure.

In March, local governments issued a net 529.9 billion yuan in special bonds, official data showed earlier.

The special bond issuance for the first four months was 1.62 trillion yuan, the ministry said.

In March, the government announced a plan to increase funding for infrastructure projects with 3.8 trillion yuan in local government special bonds, up from 3.65 trillion yuan in 2022.

A sharp drop in land sales and fewer options for raising fresh funds have contributed to local government debt growing to more than $9 trillion.

The finance ministry said April net local government debt issuance stood at 282.5 billion yuan with local government debt refinancing at 390.3 billion yuan.

China’s economy grew at a faster-than-expected pace in the first quarter, but April’s industrial output and retail sales growth undershot forecasts and suggest the economy is losing steam.

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Whether fiscally stretched local governments will be able to follow through on spending to boost GDP growth, as they have in the past, will be a key test for China’s modest economic growth target of around 5% this year.