BEIJING - China's fiscal revenue rose 1.7 percent year on year to 1.563 trillion yuan ($224 billion) in June, data from the Ministry of Finance showed on Friday.

Revenue growth was down from the 7.3-percent gain posted for May.

Fiscal revenue grew 7.1 percent to 8.55 trillion yuan in the first half of this year.

The ministry expects revenue growth to be further affected by reform policies in the following months as downward pressure on China's economic growth remains.

China's economy expanded 6.7 percent year on year in the second quarter, stable from the first quarter.

In the face of continued economic headwinds, China has made supply-side reform an economic priority, and tax cuts to lower costs for business are a major policy option, putting more pressure on revenue growth.

The central government collected 3.72 trillion yuan in fiscal revenue, up 3.3 percent year on year in H1, while local governments saw fiscal revenue rise 10.1 percent to 4.84 trillion yuan. Tax revenue grew 8.6 percent to 7.22 trillion yuan.

Thanks to the warming housing market in some regions, real estate business taxes went up 17.3 percent year on year to 229.3 billion yuan in H1. Natural resource taxes plunged 22.1 percent due to sluggish crude oil and coal prices.

In June, fiscal spending gained 19.9 percent to hit 2.26 trillion yuan, bringing expenditures for the January-June period to 8.92 trillion yuan, up 15.1 percent year on year.

To cushion the blow from sluggish revenue growth and balance the need for proactive fiscal policies to support growth, China plans to increase its deficit-to-GDP ratio to 3 percent this year from 2.3 percent last year.