China will stick to its loose fiscal policy for at least three years despite a growing budget deficit, a government economist said in comments published on Wednesday.

Even by conservative estimates, the timeframe for this round of proactive fiscal policy should cover at least three years, Gao Peiyong, a researcher with the Chinese Academy of Social Sciences, wrote in the People's Daily, the ruling Communist Party's mouthpiece.

Gao said China's economic recovery was not yet on a solid footing, so an early end to the stimulus now coming from tax cuts and massive fiscal spending could lead to a new downturn.

It is both necessary and urgent to seek stable economic development at the cost of fiscal imbalance, Gao said. It is inevitable that China's fiscal situation will run into difficulties in the not-too-distant future.

Beijing wants to keep its budget deficit to within 3 percent of GDP this year, a target that economists say will be tough to hit given current spending and revenue trends. The deficit in 2008 was about 0.5 percent of GDP.

China is executing a $586 billion stimulus package, announced last November, to help the world's third-largest economy overcome the global economic slump.

(Reporting by Zhou Xin and Alan Wheatley; Editing by Ken Wills)

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