China’s New Credit Rebounds as PBOC Keeps Up Monetary Easing

China’s broadest measure of new credit rose far more than expected last month, signaling that central bank stimulus is stabilizing the world’s second-largest economy.

Aggregate financing was 2.34 trillion yuan ($360.7 billion) in March, the People’s Bank of China said, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey. New yuan loans were 1.37 trillion yuan, compared with an estimate of 1.1 trillion yuan.

Strong credit expansion signals the central bank has prioritized boosting growth, after the week-long lunar new year holiday distorted data for January and February. New momentum at factories and a property sales recovery in bigger cities helped revive confidence in the nation’s economy.

"The rebound was sustained by medium, long-term loans to companies as well as the residents as the property market is booming," analysts at Bank of Communications Co. led by chief economist Lian Ping in Shanghai wrote in a note before the data release.

The data was released at the same time that China announced gross domestic product rose 6.7 percent in the first quarter from a year earlier, meeting the median projection of economists in a Bloomberg survey. Expansions in industrial output, retail sales and fixed-asset investment all beat forecasts.

China’s M2 money supply increased 13.4 percent from a year earlier, the PBOC said, compared with a 13.5 percent gain economists projected and a 13.3 percent February rise.

— With assistance by Xiaoqing Pi

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