China will step up its policy to support the economy, central bank officials said, adding that the overall debt level is expected to rise amid efforts to revive the economy.
The remarks at a briefing came against the backdrop of Yi Gang, governor of the People’s Bank of China (PBOC), vowing to maintain an accommodative monetary policy to support economic recovery.
“We will use various monetary policy tools in a timely and flexible manner, give more play to the dual functions of aggregate and structural tools, and boost support for the real economy,” said Ruan Jianhong, head of the statistics department.
The central bank will maintain reasonably ample liquidity and push financial institutions to lower financing costs for companies, said Zou Lan, head of its monetary policy department.
“In the second half of the year, the economic performance continues to face great uncertainty and instability. We have to work hard to stabilize the economy and pay attention to changes in the inflation situation.”
Analysts polled by Reuters estimated that China’s economic growth is likely to have slowed sharply to 1% in the second quarter from 4.8% in the January-March period, suggesting policymakers may need to do more. to stimulate growth.
In June, the interest rate on new loans to companies stood at 4.16%, 34 basis points less than a year earlier, while the interest rate on new time deposits was 2.5%, 16 basis points less. than in the previous period, Ruan said.
New bank lending in China soared in June, rising more than expected, while overall credit growth accelerated as the central bank stepped up efforts to revive the pandemic-hit economy.