The latest investigation shows that the forecasted total of newly added Renminbi loans in September this year is 1.8 trillion yuan, a decrease of about 21% compared to the same period last year, indicating that domestic demand in China remains weak.
According to a report on the Caixin website on October 12, a survey conducted by Caixin Media recently on 14 domestic and foreign institutions revealed that economists predicted the total of newly added Renminbi loans in September 2024 to be 1.8 trillion yuan, a 21% decrease from the 2.31 trillion yuan in the same period last year. The forecast range is between 1.5 trillion yuan and 2.2 trillion yuan.
In terms of social financing, economists surveyed estimated that the total of new social financing in September was 3.5 trillion yuan, a 15% decrease from the 4.13 trillion yuan in the same period last year. The predicted range is between 3 trillion yuan and 4 trillion yuan, with the previous figure being 3.03 trillion yuan.
Nomura Securities projected a 4 trillion yuan increase in social financing in September. Wind data shows that from September 1st to 27th, net financing for government bonds was about 1.5 trillion yuan, significantly higher than the 0.95 trillion yuan in the same period last year; while net financing for corporate bonds decreased from -820 billion yuan last year to -103 billion yuan.
Huatai Securities’ Chief Macro Analyst Yi Yi expects the decline in new Renminbi loans in September to be “mostly due to the drag from the real estate sector”. UBS’s Chief China Economist Wang Tao revealed that the year-on-year decline in new home sales in 30 cities in September expanded to 34%, and the year-on-year decline in contracted sales area for the top 100 real estate companies further widened to 40%.
In terms of exchange rates, four institutions made predictions on the Renminbi to US dollar exchange rate at the end of October 2024, with the average forecast being 7.04 yuan to 1 US dollar, a slight depreciation from the closing price of 7.02 yuan on September 30, 2024. Three institutions predicted the average CFETS index of the Renminbi at the end of October 2024 to be 98.43, a depreciation from 98.36 on September 30, 2024.
Additionally, the survey of these 14 domestic and foreign institutions indicates that the year-on-year increase in the Consumer Price Index (CPI) in September is expected to be the same as or higher than that in August; due to weak domestic demand, the month-on-month decrease in the Producer Price Index (PPI) will continue to widen.
Among them, four institutions predict that the year-on-year growth rate of the CPI in September will be higher than in August, five expect it to remain unchanged, and another five believe it may be lower than the previous figure, with an average forecast of 0.6%, matching August, and a range of 0.3% to 0.9%.
Economists surveyed all expect the year-on-year decrease in the PPI in September to continue, with an average forecast of -2.5%, an increase of 0.7 percentage points from August, and a range of -2.7% to -2.2%.
Zhang Yu, Chief Macro Analyst at Huachuang Securities, believes that although there has been a noticeable increase in commodity prices since the stimulus policies for the economy were introduced on September 24, considering that the PPI survey dates are set on the 5th and 20th of each month, the price increase in the week before the holiday will not be reflected in the month-on-month comparison of the September PPI, leading to a further decline in the PPI.