According to the report from the People's Bank of China (PBoC), in February, Chinese banks provided new loans in yuan in the amount of 1,010 trillion yuan. Therefore, credit growth has slowed sharply compared to January (5.130 trillion yuan, an all-time high). Economists had expected lending to grow by 1.275 trillion yuan.
Meanwhile, total social financing grew by 2,290 trillion yuan, compared with an increase of 7,060 trillion yuan (an all-time high) in January. Consensus estimates suggested an increase of 2.500 trillion yuan.
The PBoC said that in February, M2, the widest measure of money supply, rose by 7.0% per year after a similar increase in January. Economists also expected growth of 7.0%. Outstanding loans in yuan rose by 7.3% per year compared with +7.5% per year in January. It was the lowest increase on record. Consensus estimates suggested an increase of 7.4% per annum.
In addition, today China’s financial regulator has urged institutions to enhance support for consumption by easing consumer credit quotas and loan terms. The National Financial Regulatory Administration (NFRA) encouraged loan renewals for eligible personal consumption borrowers. Financial institutions should boost credit supply to consumer service industries, including retail, hospitality, tourism, education, and healthcare.
With sluggish consumer spending now a key priority for Beijing in 2025, policymakers are intensifying efforts to stimulate demand amid ongoing economic challenges and trade tensions with the US. Analysts, however, warn that deflationary pressures may persist.