BEIJING, Feb 10 (Reuters) – New bank loans in China jumped more than expected to a record 4.9 trillion yuan ($720.21 billion) in January as the central bank looks to kickstart a recovery in the world’s second-biggest economy after the lifting of harsh pandemic controls.
A strong rebound in credit demand will be essential for an economic revival this year after harsh COVID measures and a crisis in the property sector dragged China’s growth down to 3% in 2022, one of its worst rates in nearly half a century.
January’s new loans more than tripled December’s tally and exceeded analysts’ expectations, according to data released by the People’s Bank of China (PBOC) on Friday.
Analysts polled by Reuters had predicted new yuan loans would jump to 4 trillion yuan in January, from 1.4 trillion yuan in December and above the previous monthly record of 3.98 trillion yuan in January 2022.
Chinese banks tend to issue more loans at the beginning of the year to gain higher-quality customers and win market share, but the size of the increase spurred hopes that business and consumer confidence is improving rapidly after the anti-COVID curbs were suddenly lifted in December.
“China’s credit data came in stronger than expected, suggesting that the credit support remains strong at the beginning of the year,” Zhou Hao, chief economist at Guotai Junan International, said in a note.
“Overall, this is a positive credit report, and is likely to help the economy to rebound significantly in the first quarter of 2023. The next focus for the markets will be property sales, which are highly correlated to bank credit.”