Weak July credit figures could heighten expectations for additional monetary stimulus as private sector borrowing remains sluggish.
China’s July credit and money supply data, due this week, may signal persistent softness in private borrowing. Analysts expect M2 growth to ease to 7.9% year-on-year from 8.0% in June, while M1 is forecast to dip to 3.9% from 4.0%. Aggregate financing is seen rising to CNY21.9tn year-to-date, though new yuan loans may decline slightly to CNY10.6tn.
June’s credit data fell short of forecasts, reinforcing concerns over subdued domestic demand. The People’s Bank of China (PBoC) has maintained a stable USD/CNY fix near 6.75, but a weak July print could increase pressure for targeted easing measures.
Fiscal efforts continue, with 90% of the 2026 local government debt swap quota completed and CNY2.5tn in special bonds issued, leaving room for acceleration in the second half.