Mubasher: China’s Manufacturing Purchasing Managers Index (PMI) shrank in January, more than expectations, along with budget deficit increase.

The index dropped to 49.4, against previous estimates (49.6) and last month (49.7), Markit Economics said.

China’s proactive financial policy is expected to continue during 2016, while budget deficit can extend to 2.2 trillion Yuan ($336 billion), or 3% of China GDP, analysts said.

Meanwhile, China’s Non-Manufacturing Purchasing Managers Index declined to 53.5 from the 54.4 last month, the National Bureau of Statistics of China posted in today’s statement.