China’s new loans beat expectations in August but home mortgages still main driver
Household borrowing contributes 71 per cent of total new bank loans as corporate demand remains weak
New loans grew more than expected in China last month but were still dominated by home mortgages driven by the housing boom in major cities, economists said yesterday.
The monthly total grew to 948.7 billion yuan (HK$1.1 trillion), compared with July’s total of 463.6 billion yuan, the central bank said. It beat expectations of 750 billion yuan from analysts polled by Reuters.
The stronger August credit data could help buoy short-term economic performance
The loan data, released as part of the central bank’s monthly financial figures, accompanied a slew of better-than-expected economic numbers suggesting that economic growth is gaining a firmer footing and raising hopes that policymakers’ efforts to reverse the slide in private investment growth are starting to work.
“The stronger August credit data could help buoy short-term economic performance,” DBS economist Nathan Chow said. “But it’s questionable whether such stronger growth, mainly due to the real estate sector, is sustainable and healthy.”
China’s economy shows more signs of strengthening as industrial output picks up, investment holds steady
Household loans, mostly home mortgages, contributed to 71 per cent of total new bank loans in August, down from more than 90 per cent in July. Residential property sales surged 25.6 per cent by floor area in the first eight months from a year earlier.
The loans extended to nonfinancial entities, including corporates and other entities, rebounded to 120.9 billion yuan, taking 13 per cent of total loan growth.