China’s bank lending declined more than expected in February, data from the People’s Bank of China revealed on Friday.
Banks extended CNY 1.23 trillion new yuan loans in February compared to CNY 3.98 trillion loans provided in January. This was also below the economists’ forecast of CNY 1.48 trillion.
Aggregate financing declined to CNY 1.19 trillion, well below the expected level of CNY 2.2 trillion.
The slowdown in lending suggests that more easing measures will be needed to meet the policy objectives that were recently laid out at the National People’s Congress, Julian Evans-Pritchard, an economist at Capital Economics, said.
The economist said policymakers are likely to be keen to see a renewed rebound in credit growth over the coming months given the ongoing economic weakness.
The next public easing move could come as soon as next Tuesday, when the PBoC will have the opportunity to cut the rate on its medium-term lending facility, the economist added.