China: Growth in new loans and M2 moderates in December
January 15, 2015
New yuan loans totaled CNY 697 billion (USD 113 billion) in December, which was below the CNY 853 billion recorded in the previous month. The print undershot the CNY 880 billion market analysts had expected. In the full year 2014, new yuan loans totaled CNY 9.78 trillion (2013: CNY 8.88 trillion). Although the total amount of new lending was above the widely-reported goal of CNY 9.5 trillion, it fell short of the new Central Bank’s expected target of CNY 10.0 trillion set in the final two months of 2014.
Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—jumped from CNY 1.15 trillion in November to CNY 1.69 trillion in December, which represented a six-month high. The print overshot the CNY 1.20 trillion that market analysts had expected. In the 12 months up to December, total social financing rose to its highest level in four months.
Annual M2 growth, the broadest measure of money supply in China, moderated from November’s 12.3% to 12.2% in December. The result came in under the 12.5% increase the market had expected and represented the slowest growth rate since March 2014. In addition, the reading was below the 13.0% target set for 2014.