China’s new yuan borrowing likely rose in September from August, a Reuters poll showed on Wednesday, as the central bank ramps up stimulus to bring the lagging economy back toward target growth this year.
Banks likely issued 1.87 trillion yuan ($264.75 billion) in net new yuan loans last month, according to the median of estimates from 16 economists.
That would be more than double the 900 billion yuan in August, but less than the 2.31 trillion yuan issued in the same month a year earlier.
To stimulate the slowing economy, the central bank unveiled its most aggressive monetary stimulus program since the bird flu pandemic in late September, coupled with significant support from the real estate market, including mortgage interest rate cuts.
The central bank has promised to continue to ease its policy.
Chinese leaders also pledged to use “necessary fiscal spending” to meet this year’s growth target of around 5%.
China’s top state planner said on Tuesday that the country was “fully confident” of meeting the 2024 growth target but stopped short of taking stronger fiscal measures, disappointing investors who had bet on the need for greater policy support to put the economy on solid footing .
Outstanding yuan loans likely rose 8.3% in September from a year earlier, the survey showed, down from 8.5% in August. The forecast figure will mark a new record low, underscoring weak household and business confidence despite falling interest rates.
M2 money growth in September was estimated at 6.4%, up slightly from 6.3% in August.
Any acceleration in government bond issuance to revive the economy could help boost growth in total social financing (TSF), a broad measure of credit and liquidity. Growth in the FST outstanding slowed, going from 8.2% in July to 8.1% in August.
China’s Finance Ministry will detail its fiscal stimulus plans to boost the economy at a press conference on Saturday, the government’s main information office said on Wednesday, signaling more forceful policies to revive growth.
Local governments issued 2.83 trillion yuan of special bonds, accounting for 90 percent of the bonds used for project construction this year, as of the end of September, the state planner said.
In addition, the central government has issued 1 trillion yuan of ultra-long-term special bonds planned for this year to finance major projects, according to the state planner.
In September, ultra-long specialty bonds likely reached 3.73 trillion yuan, up from 3.03 trillion yuan in August, according to the survey.
The data is expected to be released October 10-15.
($1 = 7.0633 Chinese Yuan Renminbi)