China’s bank lending decreased more-than-expected in December, data from the People’s Bank of China revealed on Thursday.
Banks extended CNY 1.14 trillion loans in December compared to CNY 1.39 trillion lending in November. This was below the forecast of CNY 1.2 trillion.
Meanwhile, total social financing, a broad measure of credit and liquidity in the economy, rose to CNY 2.1 trillion, exceeding expectations of CNY 1.7 trillion.
Growth in outstanding broad credit was unchanged last month as a slowdown in bank loans outstanding was offset by an easing contraction in shadow credit, Julian Evans-Pritchard, an economist at Capital Economics, said.
The unresponsiveness of credit growth to recent easing strengthens the case for additional rate cuts in order to prevent credit growth, and thereby growth, from slipping further, the economist added.