Recently, the financial data for the first five months of this year was released, showing that the effects of a package of financial policies have begun to emerge. The total volume of finance has steadily increased, with lower costs and a better structure. Financial services have been precisely directed towards key areas such as technological innovation and small and micro enterprises, effectively supporting economic structural adjustment and the transformation of old and new growth drivers, and promoting high-quality development of the real economy.
Total Volume of Finance
A reasonable growth in the total financial volume can meet effective financing demands and provide support for the development of the real economy. At the end of May, the balance of broad money supply (M2) increased by 7.9% year-on-year, while the balance of narrow money supply (M1) increased by 2.3% year-on-year. In the first five months, the cumulative increment of social financing scale was 3.83 trillion yuan more than that of the same period of the previous year, and the stock of social financing scale increased by 8.7% year-on-year.
In May, RMB loans increased by 620 billion yuan, 340 billion yuan more than the previous month. Multiple data points indicate that the total volume of finance has maintained steady growth, the growth rate of M1 has significantly rebounded, the growth rate of the total social financing scale has remained at a high level, and financial services for the real economy have continued to strengthen.
Financing Costs
Financing costs have remained low, supporting the economy to stabilize and improve. In May, the weighted average interest rate of newly issued loans (both domestic and foreign currencies) by enterprises was approximately 3.2%, about 50 basis points lower than that of the same period last year. The weighted average interest rate of newly issued loans for personal housing (both domestic and foreign currencies) was approximately 3.1%, about 55 basis points lower than that of the same period of the previous year.
Since the implementation of policies such as reserve requirement ratio cuts, interest rate cuts, and reductions in the interest rate of housing provident fund loans, the financing costs for enterprises and individuals have continued to decline, further stimulating credit demand. In May, both loans to enterprises and institutions and household loans increased month-on-month, playing a positive role.
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