China reported unexpectedly strong credit growth for February, with money supply expanding at the fastest pace in nearly 7 years, as Beijing looks to support a nascent economic recovery amid rising global risks.
The government’s lifting of harsh pandemic curbs in December and other policy easing measures have started to rekindle credit demand in the world’s second-largest economy, after a COVID-induced slump in business and consumer confidence in the last few years.
Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 9.9% in February from a year earlier, the highest since November 2022, and rising from 9.4% in January.
TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.
Other key credit gauges also showed a solid pick-up.
Broad M2 money supply grew 12.9% from a year earlier, central bank data showed on Friday, the strongest pace since March 2016. The reading was well above estimates of 12.5% forecast in the Reuters poll and a 12.6% pace in January.
New bank lending fell much less than expected in February from a record high the previous month.
Chinese banks extended 1.81 trillion yuan ($260 billion) in new loans last month. Analysts polled by Reuters had predicted they would fall to 1.50 trillion yuan from 4.9 trillion yuan in January, and compared with 1.23 trillion yuan a year earlier.
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