Bank Lending & Broad Credit (Mar.)

Bank loan growth jumped to a 17-month high in March. And broad credit growth rose to its highest since December. Both were stronger than most anticipated. We expect broad credit growth to accelerate a little further as demand remains robust and base effects become more favourable in the next few months. But this upward trend may not be sustained in the second half of the year, due to regulatory restrictions on lending, linked to concerns about financial risk, and the restrained policy settings announced at the National People’s Congress last month.