China’s bank lending increased less than expected in November despite efforts of the central bank to prop up credit and support economic growth, official data revealed Monday.
Banks extended CNY 1.21 trillion in new yuan loans in November, figures from the People’s Bank of China showed. This was weaker than economists’ forecast of CNY 1.4 trillion but it improved from CNY 615.2 billion in October.
M2 money supply expanded at a faster pace of 12.4 percent from the last year, faster than the 11.7 percent rise expected by economists.
Total social financing, a broad measure of credit and liquidity in the economy, increased to CNY 1.99 trillion. Still, this was below economists’ forecast of CNY 2.1 trillion.
Data provides a clear sign that monetary easing has failed to gain traction due to virus disruption and waning confidence among households and firms, Capital Economics’ economist Julian Evans-Pritchard, said.
The economist expects the leadership to signal plans for strong policy easing at the Central Economic Work Conference this week, and there is a chance that the central bank will lower its Medium-term lending facility rate on Thursday.
“Nonetheless, a substantial rebound in credit growth seems unlikely until the bumpy transition to living with the virus has run its course,” the economist added.
Last month, the PBoC had kept the rate on the medium-term lending facility, which acts as a guide to the loan prime rate, unchanged at 2.75 percent.