Chinese bank lending exceeded expectations in May, data from the People’s Bank of China revealed Thursday.
Banks extended CNY 1.5 trillion new loans in May, almost unchanged from the previous month’s CNY 1.47 trillion. The expected level was CNY 1.4 trillion.
Total social financing increased marginally to CNY 1.9 trillion in May but remained below the economists’ forecast of CNY 2 trillion.
The broad M2 money supply grew 8.3 percent, faster than the 8.1 percent increase seen in April.
The slowdown in credit growth is happening even faster than anticipated a couple of months ago, Julian Evans-Pritchard, an economist at Capital Economics, said. The slowdown is expected to continue over the coming months.
While the economy has so far weathered the withdrawal in policy support very well, the usual lags mean that weaker credit growth will become a growing headwind to activity over the next few quarters, Evans-Pritchard noted.