China's finance minister on Friday defended the country's moderately expansionary fiscal policy, saying it is a must in coping with downward pressures in its economy.

Chinese finance minister Lou Jiwei answers questions during a press conference for the third session of China's 12th National People's Congress (NPC) on fiscal and tax reform, in Beijing, capital of China, March 6, 2015. (Xinhua/Li Xiang)

"We must adopt a moderately expansionary fiscal policy in coping with downward pressures, as we de-leverage the economy step by step while preventing it from nose-diving," Lou Jiwei told a press conference on the sidelines of the ongoing National People's Congress annual session.

Signs of recovery in world economy are not obvious enough, including that in the United States, said Lou, adding that China will be affected by such "new normal" of the world economy.

China will keep its macro-economic policy stance unchanged in 2015, vowing a proactive fiscal policy and prudent monetary policy, according to a government work report on Thursday.

A proactive fiscal policy denotes a moderately expansionary policy that creates demand and stimulates the economy primarily by expanding domestic demand, while the ultimate goal of a prudent monetary policy is to maintain price stability.

China also increased its budget deficit to 2.3 percent of gross domestic product (GDP) in 2015 from last year's 2.1 percent. Lou said based on a different set of calculation rules, the actual deficit-to-GDP ratio could rise to about 2.7 percent.

Noting the "strength" of the fiscal policy, Lou said it will play a key role in supporting economic growth and withstanding downward pressures.

Admitting subdued growth in the government income, Lou said the ministry has taken various measures to cope with the problem, including raising consumption tax of refined oil or asking sovereign wealth funds to hand in profits.

The Chinese economy grew 7.4 percent last year, the lowest pace in 24 years. The government on Thursday lowered its 2015 economic growth target to about 7 percent.