China’s New Bank Loans Fall Short of Expectations
China’s new bank loans for September were lower than anticipated, according to data released by the central bank. Despite efforts to boost the country’s fragile economic recovery amid weak demand, the figures fell short of analysts’ forecasts.
Weaker Loan Growth
In September, Chinese banks issued 2.31 trillion yuan ($316.15 billion) in new yuan loans, a significant increase from August’s 1.36 trillion yuan. However, this figure failed to meet Reuters’ poll predictions of a jump to 2.50 trillion yuan, and it was also lower than the amount recorded in September of the previous year.
The rise in household loans, including mortgages, reached 858.5 billion yuan, up from 392.2 billion yuan in August. Meanwhile, corporate loans climbed to 1.68 trillion yuan from 948.8 billion yuan in August.
Central Bank’s Monetary Policy Measures
The release of these figures coincided with a central bank official’s commitment to implementing monetary policy with precision and strength. The official emphasized that the bank possesses ample policy leeway to support the economy.
In September, the central bank reduced the reserve requirement ratio for the second time this year, aiming to stimulate domestic demand and counter the effects of a prolonged property slump and sluggish consumer spending.
Analysts Remain Skeptical
Despite signs of stabilization, some analysts remain unconvinced that China will achieve its annual growth target of approximately 5%. A subdued property market and weak consumer spending continue to raise concerns.
The data from the central bank also revealed that the broad measure of money supply, known as M2, expanded by 10.3% compared to the previous year, falling short of Reuters’ poll forecast of 10.7%. In August, M2 had grown by 10.6%.
Outstanding yuan loans in September grew by 10.9% year-on-year, lower than expectations and down from 11.1% in August.
Total Social Financing Remains Stable
The annual growth rate of outstanding total social financing (TSF), which encompasses credit and liquidity in the economy, remained unchanged at 9% in September, the same as August.
In September, TSF increased to 4.12 trillion yuan from 3.12 trillion yuan in August, surpassing analysts’ predictions of 3.8 trillion yuan.
These figures indicate that while China’s new bank loans fell short of expectations, total social financing remained stable, providing some hope for the country’s economic recovery.