China's Credit Growth Falls Short of Expectations in April
China's credit growth slips below estimates
The Economic Times
Image: The Economic Times
In April, China's credit growth significantly underperformed expectations, with aggregate financing rising by only 630 billion yuan (approximately $93 billion), compared to 1.2 trillion yuan a year earlier. New loans declined by 15.3 billion yuan, indicating weak borrowing demand and raising concerns about the sustainability of recent economic recovery.
- 01Aggregate financing increased by only 630 billion yuan in April, far below the expected 1.3 trillion yuan.
- 02New loans contracted by 15.3 billion yuan, contradicting forecasts for an increase.
- 03Households net repaid 786.9 billion yuan, the highest since 2010, reflecting cautious borrowing behavior.
- 04Government financing accounted for most of the credit expansion, with net bond financing rising by 904 billion yuan.
- 05Analysts express concerns about the sustainability of investment recovery in China's economy.
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In April, China's credit growth slowed unexpectedly, with aggregate financing rising by only 630 billion yuan (approximately $93 billion), a significant drop from 1.2 trillion yuan a year earlier. This figure fell short of the median economist forecast of nearly 1.3 trillion yuan. New loans also saw a decline, contracting by 15.3 billion yuan, contrary to expectations of a 300 billion yuan increase. Households exhibited a cautious approach to borrowing, net repaying 786.9 billion yuan, the largest repayment since 2010. This trend raises concerns about the sustainability of the recent investment recovery in the world's second-largest economy, as analysts predict that without an expansion in investment, domestic demand will remain subdued. Government financing was the primary driver of credit growth, with net bond financing increasing by 904 billion yuan. The overall data suggests a weak credit demand, which could hinder economic momentum moving forward.
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The slowdown in credit growth may hinder consumer spending and investment, affecting overall economic growth.
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