China’s bank lending declined in April as Covid lockdowns disrupted economic activity, data from the People’s Bank of China showed Friday.
Banks extended CNY 645.4 billion in new yuan loans in April compared to the expected level of CNY 1.51 trillion and March’s lending of CNY 3.13 trillion.
Aggregate financing totaled CNY 910.2 billion versus CNY 4.65 trillion in March.
The PBoC pinned the blame for the slowdown on virus disruptions, which have curbed demand for mortgages and private sector investment, Julian Evans-Pritchard, an economist at Capital Economics, said.
Provided that the recent improvement in the virus situation continues, that drag should start to ease this month, he noted. Nonetheless, the weak pace of lending in April will increase pressure on the PBoC to do more to support the economy.
Iris Pang, an ING economist, said lockdowns have created problems for banks in China as they have become more risk-averse. China’s central bank has promised to help but it lacks a solution.