China’s borrowing growth plunged in October despite a push by local governments to issue more loans for infrastructure spending, suggesting that further action will be needed to shore up demand.
Net new loans fell to Rmb 697 billion ($100.3 billion) last month, down from Rmb 1,380 billion in September, according to National Bureau of Statistics data. This fell short of market expectations (Bloomberg media: Rmb 905 billion), which anticipated a surge in lending on the back of government directions.
This marks a 50% decline from September, and a marginal 0.1 percentage point drop compared with a year before, the data shows. The slowdown appears to have come largely from weaker lending to businesses, while household borrowing stabilised during the month.
China’s total social financing (TSF), a gauge of credit levels and liquidity in the economy, was down 67% from September, at Rmb 728.8 billion. On an annual basis, growth fell to a record low of 10.2%.
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