Weak data may signal stimulus moves
Print Edition
BANKS in China lent less than expected last month and broad money supply grew by the slowest in seven months, giving rise that more stimulus measures are needed to address the protracted economic slowdown.
The amount of new yuan loans issued by Chinese banks fell by a third from September to 548.3 billion yuan (US$89.6 billion) in October, the People’s Bank of China said in a statement yesterday.
That missed market hopes of 650 billion yuan according to a Reuters poll, but was 42.3 billion yuan more than October last year.
M2, the broader measure of money supply, rose 12.6 percent in October from a year earlier, missing the official target of 13 percent for the third month in a row.
Total social financing, the broadest measure of credit supply including loans, bank acceptance bills, corporate bonds and equity financing, totaled 662.7 billion yuan in October, 472.8 billion yuan less than September and 201.8 billion yuan less than October last year.
“Major financial indicators all weakened in October, missing market expectations and confirming that the economy was still going through a correction,” said Huang Shicheng, a researcher with Sealand Securities. “Demand for credit expansion was weak.”
Earlier data showed that China’s economy lost pace again, with industrial activities and fixed-asset investment easing further in October.
An economist said the government will take broader steps to stabilize growth.
“Looking further, we expect two reserve requirement rate cuts in 2015 as such cuts are necessary to keep stable M2 growth,” said Zhu Haibin, chief economist with JP Morgan.
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