(Bloomberg) -- China’s top leaders pledged to raise the fiscal deficit and sell special sovereign bonds to counter the economic fallout from the coronavirus.

China will raise its fiscal deficit as a share of gross domestic product, issue special sovereign debt and allow local governments to sell more infrastructure bonds as part of a stimulus package to stabilize the economy, according to a Politburo meeting on Wednesday, Xinhua reported late Friday.

No other details of the fiscal stimulus were given in the report. China hasn’t released its budget for 2020 because the health crisis has delayed a key political meeting. The ratio hasn’t exceeded 3% of economic output for more than a decade.

China Should Drop 3% Deficit Limit, Former PBOC Official Says

“Economic development, especially the resumption of supply chains, is facing new challenges as imported virus cases rise,” the report said, citing the meeting. “Stronger macro measures to offset the blow are needed to expand domestic demand.”

The meeting also reiterated China will meet its goal of building a “moderately prosperous society” this year, which signals that economic growth will be around 5.6% for 2020.

China’s Economy to Grow the Slowest Since 1976 This Year

In a separate statement published late Friday, the People’s Bank of China called for better coordination of global macro policies, while re-emphasizing it will keep liquidity sufficient to help with the real economy and watch out for inflation risks.

Economic activity in China collapsed in the first quarter as the government shut most of the country to counter the spread of the coronavirus. Economists have lowered their median forecast for economic growth to 2.9% for 2020, the slowest pace since 1976, when the Cultural Revolution wrecked the economy and society.

The Politburo’s moves signal an escalation in China’s measured and targeted approach to stimulus, bringing it more in line with global efforts to stem the economic damage. While details weren’t available, a higher deficit in general can ease local governments’ revenue stress and provide room for more tax cuts and infrastructure investment.

China’s Coffers Are Depleted Just as Virus Spurs Spending

Special sovereign bonds can be an effective way to raise funding without blowing up the regular budget because they are not usually not counted in the fiscal deficit for the year. China has issued special sovereign bonds twice before -- once in 1998 to recapitalize state banks in the wake of the Asian financial crisis and again in 2007 to set up China Investment Corp., when funds came from foreign-exchange reserves.

By selling special sovereign bonds, top policy makers are opting to expand the balance sheet of the central government because it is in a relatively better fiscal situation than local authorities.

The debt sales would need approval from the legislature, whose standing committee is set to meet in April.

(Updates with background in third paragraph, chart, PBOC statement in sixth paragraph and details in final three graphs)

©2020 Bloomberg L.P.