The Hindu Business Line

China’s credit growth dips as weak econ­omy hits de­mand

- BLOOMBERG Business · Finance · China · People's Bank of China · Bank of China

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.

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