China's bank lending declined more than expected in July, figures from the People's Bank of China showed Friday.
Banks provided CNY 463.6 billion new yuan loans in July, less than economists' forecast of CNY 800 billion and below June's 1.38 trillion lending.
Total social financing dropped to CNY 487.9 billion from CNY 1.63 trillion in June.
M2 broad money supply climbed 10.2 percent year-on-year in July, slower than June's 11.8 percent increase. Annual growth in M1 improved to 25.4 percent from 24.6 percent in June.
Julian Evans-Pritchard at Capital Economics, said credit growth is likely to slow further in the coming months given that the PBOC has recently refrained from easing monetary policy.
The impact of slower lending won't be felt immediately but by the end of the year it risks becoming a growing headwind to already weak investment growth, the economist noted.
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