BEIJING (Reuters) – China’s new yuan loans likely hit a record high in January, and money supply growth is also expected to pick up, as the central bank seeks to shore up slowing growth in the world’s second-largest economy.
Chinese banks tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.
The banks are estimated to have issued 3.69 trillion yuan ($580.30 billion) in net new yuan loans last month, more than tripling from 1.13 trillion yuan in December, according to the median estimate in the survey of 18 economists.
That would surpass a monthly record of 3.58 trillion yuan in January 2021.
China’s economy cooled over the course of last year and faces multiple headwinds as a property downturn hurts investment and the country’s efforts to contain local cases of the highly contagious Omicron variant weigh on consumption.
The central bank has cut reserve requirement ratios (RRR) for banks and benchmark lending rates, and more easing steps are expected.
Authorities have been marginally easing financing curbs for property developers and speeding up mortgage issuance for home buyers.
Annual outstanding yuan loans were expected to grow by 11.6% for January, the same as in December, the poll showed. Broad M2 money supply growth in January was seen at 9.2%, compared with 9.0% in December.
China has also been stepping up infrastructure investment to cushion the economic slowdown, funded by faster issuance of local government special bonds.
China has issued 1.46 trillion yuan in the 2022 advance quota for local government special bonds to help spur investment and support the economy.
Any acceleration in government bond issuance could help boost total social financing (TSF), a broad measure of credit and liquidity. Outstanding TSF rose 10.3% in December, up from 10.1% in November.
In January, TSF is expected to rise to 5.46 trillion yuan, up from 2.37 trillion yuan in December.
($1 = 6.3588 Chinese yuan renminbi)
(Reporting by Judy Hua and Kevin Yao; Editing by Shailesh Kuber)
