China’s credit growth dips as weak economy hits demand

China’s credit growth in July slowed to the second-lowest amount this year, as downward seasonal factors combined with weak domestic demand to curb the supply of loans.

Aggregate financing was 1.01 trillion yuan ($143 billion) last month, compared with about 2.26 trillion yuan in June, said the People’s Bank of China on Monday. The median estimate of economists was 1.63 trillion yuan. Key Insights Financial institutions offered 1.06 trillion yuan of new loans in the month, versus a projected 1.28 trillion yuan. Banks’ new yuan loans to non-financial enterprises was lowest since October 2018. Broad M2 money supply grew 8.1 per cent from a year earlier, slower than in June.

The decline is at least partly due to seasonal patterns — July’s credit growth is usually slower than that in June. The only month this year with a lower total was February, when Lunar New Year falls.