BEIJING (Reuters) – Chinese banks extended 2.24 trillion yuan ($312.47 billion) in new loans in June, more than triple the amount in May and beating analysts’ forecasts, as stimulus measures boosted credit demand during the U.S.-China trade truce.
Analysts polled by Reuters had predicted new yuan loans would reach 1.8 trillion yuan in June, far exceeding 620 billion yuan in May. Monday’s lending figures, released by the People’s Bank of China (PBOC), also surpassed last June’s 2.13 trillion yuan.
The PBOC does not provide monthly breakdowns, but Reuters calculated the June figure based on the central bank’s January-June data, compared with the January-May figure.
New yuan loans totalled 12.92 trillion yuan for the first half of the year, the PBOC data showed, down from 13.27 trillion yuan in the same period last year.
Household loans, mostly mortgages, rose significantly to 597.6 billion yuan in June from 54 billion yuan in May, according to Reuters calculations.
Corporate loans rose to 1.77 trillion yuan from 530 billion yuan in May.
A prolonged property slump in the world’s second-largest economy and heightened job insecurity have contributed to borrowers’ hesitance to take on more debt, despite government efforts to promote domestic consumption and implement policy stimulus.
China introduced broad stimulus measures in May to counter the impact of U.S. tariffs and gained some relief after striking a 90-day trade truce with Washington, followed by a London framework agreement in June.
However, concerns about weak domestic demand and factory deflation continue to pressure policymakers for additional stimulus in the wake of renewed trade uncertainty as the U.S. escalates its trade war with a new round of tariffs.
The PBOC last month pledged to continue implementing a moderately loose monetary policy and said it would guide financial institutions to step up credit supply and push for lowering of social financing costs.
Analysts said further monetary easing was likely to happen very gradually, held back by worries that faster credit growth would exacerbate rather than alleviate industrial overcapacity.
Monday’s data also showed June outstanding yuan loans grew 7.1% from a year earlier, the same pace as in May. Analysts had expected 7.0% growth.
Growth in broad M2 money supply sped up to 8.3% in June versus a year earlier, above the 8.1% forecast in the Reuters poll. M2 expanded 7.9% in May.
The narrower M1 money supply grew 4.6% from a year earlier, compared with 2.3% in May.
Annual growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, rose 8.9% last month, improving from 8.7% in May.
($1 = 7.1688 Chinese yuan renminbi)
(Reporting by Kevin Yao, Shi Bu, Ellen Zhang and Qiaoyi Li; Editing by Shri Navaratnam)
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