New bank lending in China dropped sharply in February, coming in below market expectations and signalling continued weakness in credit demand in the world’s second largest economy.
Data released by the People’s Bank of China showed that Chinese banks issued 900 billion yuan in new yuan loans during February. The figure fell short of economists’ forecasts and represented a steep decline from the previous month when lending typically surges due to seasonal factors.
Analysts had expected new loans to reach around 1.5 trillion yuan, making February’s figure significantly lower than projections.
The drop reflects weaker borrowing demand from businesses and households amid slowing economic momentum and lingering concerns in the property sector. Companies have remained cautious about expanding investment, while consumers continue to restrain spending.
The latest data adds to signs that China’s economic recovery remains uneven despite government stimulus measures aimed at boosting growth. Authorities in China have introduced various policies in recent months to support lending, revive the property market, and encourage infrastructure investment.
Economists say weak credit growth could increase pressure on policymakers to introduce further stimulus, including potential interest rate cuts or additional liquidity measures from the People’s Bank of China.
China’s banking data is closely watched by global investors because lending activity is seen as a key indicator of economic confidence and future growth in the country.
Despite the slowdown in February lending, officials have indicated they will continue to use targeted policies to stabilise the economy and support key sectors facing financial strain.
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