China Money October 2017

China

China: Growth in M2 and new yuan loans moderates in October

November 14, 2017

Chinese banks extended CNY 663 billion (USD 100 billion) in new yuan loans in October, well below September’s CNY 1.27 trillion. The print undershot the CNY 780 billion markets had expected and represented the lowest mark in one year. In the 12 months up to October, new yuan loans totaled CNY 13.7 trillion (September: CNY 13.6 trillion).

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—fell from September’s CNY 1.82 trillion to CNY 1.04 trillion in October.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—declined from September’s 9.2% to an all-time low of 8.8% in October. The reading overshot the 9.2% that market analysts had expected.

FocusEconomics Consensus Forecast participants expect M2 to expand 9.3%, which is down 0.1 percentage points from last month’s forecast in 2018. In 2019, the panel also sees M2 growth of 9.3%.


Author: Ricard Torné, Head of Economic Research

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China Money October 2017

Note: New yuan loans in CNY billion and year-on-year variation of M2.
Source: People’s Bank of China (PBOC) and FocusEconomics calculations.


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