China reported unexpectedly strong credit growth for February, with money supply expanding at the fastest pace in nearly 7 years, as Beijing looks to support a nascent economic recovery amid rising global risks, reports Reuters. The government’s lifting of pandemic curbs in December and other measures have started to rekindle credit demand in the world’s second-largest economy, after a COVID-induced slump rattled business and consumer confidence. But there are some fears that momentum could fade after the initial bounce.
“China’s strong credit extension in February has somehow offset the recent concerns clouding the pace of economic recovery, suggesting that the overall economy is still on a solid footing,” said Zhou Hao, economist at Guotai Junan International.
Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 9.9% in February from a year earlier, the highest since November 2022, and rising from 9.4% in January.