The average estimate by economists for the amount of loans that banks issued in July was 678 billion yuan, down significantly from the loan figure for June.
Most economists forecast July’s new loans to be between 600 billion and 700 billion yuan, Caixin’s survey of economists at more than 20 financial institutions shows. Banks lent nearly 920 billion yuan in June.
The drop may be seasonal, Industrial Bank chief economist Lu Zhengwei said, citing records that show the amount of new loans in July fell from the previous month in nine out of the past 11 years.
In addition, the amount of July’s new loans has never exceeded 550 billion yuan since 2001, he said, but this year may be an exception given the central government’s policy to stimulate investment.
Bank of Communications chief economist Lian Ping said the slow recovery of investment and the property market was not enough to offset the impact of shrinking deposits. He also said the capital leverage ratios at many enterprises are already too high for them to keep borrowing, and this would continue to restrain lending growth.
BoC forecast July’s new loan figure to be only 600 billion yuan, the lowest among all surveyed institutions. Lian expected this year’s total new lending to be between 8 and 8.5 trillion yuan.
Eleven survey respondents said the central bank would reduce banks’ reserve-requirement ratio this month, and 10 others said the benchmark interest rates will remain unchanged.