China’s central bank disclosed on Friday that new yuan loans in May totaled 520 billion yuan ($76.92 billion). The figure represents a rebound from April, when new lending contracted by 10 billion yuan, but it did not meet the consensus estimate of 550 billion yuan from analysts surveyed.
Compared with the same month a year earlier, the May total is down from 620 billion yuan recorded in May of the prior year. The People’s Bank of China does not publish a monthly breakdown of lending flows; the May number was derived by comparing the bank’s January-May aggregate lending data with its January-April totals.
Monetary aggregates released alongside the lending figures showed China’s M2 money supply expanding 8.6% year-on-year in May, a touch above the 8.5% pace expected by analysts. Separately, outstanding yuan lending stood 5.5% higher year-on-year at the end of May, in line with survey forecasts.
The set of statistics released by the central bank provides a snapshot of credit creation and broader money growth for the month of May. The central bank’s reporting practices - specifically the absence of a direct monthly lending breakdown - mean the headline new-loan number is a calculated result based on cumulative data through the first five months of the year versus the first four months.
Readers should note the key numerical takeaways: 520 billion yuan of new loans in May; a recovery from a 10 billion yuan contraction in April; a shortfall relative to the 550 billion yuan analyst forecast; and a decline versus 620 billion yuan in May a year earlier. In parallel, M2 growth of 8.6% and year-end-May yuan lending growth of 5.5% matched or slightly exceeded expectations.
Methodology
The May new-loan total cited by the central bank is not presented as a standalone monthly release. Instead, it is calculated by taking the PBOC’s reported lending aggregate for January through May and subtracting the aggregate for January through April, producing the incremental amount attributed to May.
Context and data limitations
The central bank’s lack of a direct monthly lending breakdown is an important consideration when interpreting the May figure. The numbers presented are based on cumulative reporting and the difference between multi-month aggregates rather than a discrete monthly release.