New bank loans in China jumped to an all-time high in January as the central bank took steps to support the economy amid a deep real estate crisis and a prolonged stock market slump.
This was reported by UNN with reference to Reuters.
Details
The Chinese economy is struggling with a sharp drop in prices and an escalating real estate crisis.
According to the central bank, in January 2024, China's financial institutions provided new loans in local currency totaling 4.92 trillion yuan, which is more than four times the amount of credit provided in December 2023 and reaches a historical record level.
The high volume of premiums in January surprised even experts: experts surveyed by Reuters news agency expected only the equivalent of 581 billion euros.
Bank lending in January was higher than expected, which will support the real economy. (...) In the future, monetary policy is likely to be slightly eased
Last year, Chinese banks granted a record 22.75 trillion yuan in new loans, up 6.8% from 2022. But year-on-year loan growth fell to a 20-year low in December as weak economic prospects left consumers and companies in no mood to take on additional debt.
Although China's economy grew by 5.2% in 2023, the deepening real estate crisis and weak demand made the recovery much more fragile, which diminishes the outlook for 2024.
The central bank said on Thursday that it would maintain policy flexibility and precision to stimulate domestic demand while keeping prices stable amid signs of a partial economic recovery and persistent risks of deflation.
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Recall
In 2022, China ceased to be the main source of US imports, losing ground to Mexico for the first time since 2008 due to reduced economic dependence on China and diversification of supply chains.