SHANGHAI: China's bank lending slumped in July from June, the central bank said Wednesday, as demand for loans weakened amid struggles in the property sector, key to the world's second-largest economy.
New yuan loans extended by domestic banks came in at 385.2 billion yuan ($62.5 billion) last month, the People's Bank of China (PBoC) said in a statement, a drastic decline from June's 1.08 trillion yuan.
The figure was just over half the median forecast of 730 billion yuan in a poll of 15 economists by the Wall Street Journal.
It was also down 45 percent year-on-year from the 699.9 billion yuan of new lending in July 2013.
Property prices in China have been falling for three consecutive months and an unnamed PBoC official said in a statement: "Effective loan demand was not as strong as in the past, due to downward pressure in the domestic economy and that the property market is undergoing some adjustments."
The real estate sector has been a major driver of the economy in recent years, and a key source of wealth for the country's rising middle classes.
Analysts have attributed June's credit surge -- which raised worries of a possible debt bubble -- to a "mini-stimulus" package China rolled out earlier this year to spur economic growth, including targeted monetary easing and speeding up infrastructure spending.
Total social financing, a broader gauge of credit in the overall economy, reached 273.1 billion yuan in July, the PBoC said, also a small fraction of the 1.97 trillion yuan in June.
"The growth in money supply and credit as well as total social financing is still within a reasonable range," the PBoC official said, adding the PBoC will continue to implement "prudent" monetary policy and "fine-tune" it to create stable financial environment.
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