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China: Growth in M2 decelerates, while new loans pick up in March

April 14, 2015

New yuan loans totaled CNY 1.18 trillion (USD 190 billion) in March, which was above the CNY 1.02 trillion recorded in the previous month. The print overshot the CNY 1.04 trillion that market analysts had expected. In the 12 months up to March, new yuan loans totaled CNY 10.4 trillion (February: CNY 10.3 trillion), which represented the highest value on record.

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—eased from CNY 1.35 trillion in February to CNY 1.18 trillion in March, which represented a four-month low. The print came in well below the CNY 1.50 trillion that market analysts had expected.

Annual M2 growth, the broadest measure of money supply in China, fell from February’s 12.5% to 11.6% in March. The result was below the 12.4% increase the market had expected.

The government targeted a M2 growth target of 12.0% for this year. FocusEconomics Consensus Forecast participants expect M2 to expand 12.2% in 2015, which is down 0.1 percentage points over the previous month’s forecast. In 2016, the panel sees M2 growth of 11.6%.


Author: Ricard Torné, Lead Economist

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China Money Chart


China Money March 2015

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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