BEIJING, Jan 13 (Reuters): New bank lending in China rose less than expected in December, but 2023 lending hit a new record as the central bank kept policy accommodative to support an unexpectedly shaky economic recovery.
Chinese banks extended 1.17 trillion yuan ($163.31 billion) in new yuan loans in December, up from November but falling short of analysts' expectations, according to data released by the People's Bank of China on Friday.
Analysts polled by Reuters had predicted new yuan loans would rise to 1.40 trillion yuan in December from 1.09 trillion yuan the previous month, and comparable with 1.4 trillion yuan a year earlier.
For the year, new bank lending hit a record 22.75 trillion yuan-roughly equivalent to the gross domestic product of the UK and up 6.8% from 21.31 trillion yuan in 2022 -- the previous record.
Still, the world's second-largest economy has struggled to regain traction, with a disappointing and short-lived post-COVID pandemic bounce. Consumer and business confidence remain weak, local governments are struggling under huge debts, and a protracted property crisis is weighing heavily on construction and investment.
With demand weak, the economy is also facing persistent deflationary pressures heading into 2024, keeping alive expectations for more policy easing measures to shore up growth.
"Monetary policy will be loosened as we face deflationary pressures," said Zong Liang, chief of research at state-owned Bank of China.
"Interest rates should be appropriately lowered given that real interest rates are relatively high."
Other data released by China on Friday reinforced views of a highly uneven economic recovery, with exports edging up but deflationary pressures persisting amid weak domestic demand.
China's 2023 bank lending at record high
FE Team | Published: January 13, 2024 22:14:07
China's 2023 bank lending at record high
Share if you like