BEIJING: New yuan loans fell to a six-month low in April, a sign of policy-makers’ possible reluctance to overstimulate the economy.
The monthly total fell almost 60 percent month on month to 555.6 billion yuan (US$85.2 billion), the People’s Bank of China said in a statement yesterday.
The figure was also below the 900 billion yuan estimate of economists polled by Reuters.
The decline followed a record credit spree in the first quarter, when banks extended 4.6 trillion yuan in new yuan loans as part of efforts to boost the economy.
Growth of M2, a broad measure of money supply, also slowed to a 10-month low of 12.8 percent in April, from 13.4 percent in March.
Total social financing, the broadest measure of credit supply that includes loans, bank acceptance bills, corporate bonds and equity financing, fell 29 percent year on year in April to 751 billion yuan.
China International Capital Corp said in a note that the figures were all weaker than expected, indicating that the credit expansion in the first quarter was unsustainable.
“There could be a greater slowdown in loans and social financing in the future if policy-makers shift their priorities away from lifting demand to reforming supply,” it said.
“The decline in companies’ need for loans and rising credit risks are also concerns caused by excessive credit expansion,” it said.
Speculation about whether the government will rein in its stimulus measures rose after the People’s Daily published an interview with an “authoritative source” on its front page on Monday, warning that too much reliance on debt to boost economic activity could lead to a financial crisis or recession.
Major economic indicators released so far point to an ongoing but fragile economic recovery in April.
Consumer inflation remained at 2.3 percent for the third consecutive month, but factory prices fell for the 50th consecutive month.
Exports in yuan-denominated terms rose 4.1 percent year on year, but imports fell 5.7 percent. The Purchasing Managers’ Index for April fell 0.1 points from March to 50.1.
