By Kevin Yao and Qiaoyi Li
BEIJING (Reuters) -China's new bank loans tumbled in July and other key credit gauges also weakened, even after policymakers cut interest rates and promised to roll out more support for the faltering economy.
Chinese banks extended 345.9 billion yuan ($47.80 billion) of new yuan loans in July, tumbling 89% from June to the lowest since late 2009 and falling far short of analysts' forecasts, data from the People's Bank of China showed on Friday.
Analysts polled by Reuters had expected new loans last month to fall sharply from 3.05 trillion yuan in June to 800 billion yuan, after record lending in the first half as the central bank tried to shore up sputtering consumption and investment.
The reading was also much lower than 679 billion yuan in July 2022.
While lending in China typically tends to fall back in July for seasonal reasons, the weak credit readings come days after other grim data which showed the world's second-largest economy slipped into deflation last month while exports and imports plummeted, adding pressure on Beijing to roll out more forceful stimulus measures.
«China’s bank loan growth fell to its lowest in seven months in July, while broad credit growth dropped to a record low,» Capital Economics said in a note to clients.
«We expect further policy rate cuts (as soon as next Tuesday) and a spike in government bond issuance in the coming months, but unless there is a wider improvement in business and household sentiment, this probably won’t lift credit growth much.»
Hobbled by weak demand at home and abroad, China's economic momentum has faltered in recent months despite strong bank lending in the first half.
Household loans, mostly mortgages, contracted by 200.7 billion yuan
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