The rate of lending in China slowed during May as growth of the money supply rose at the slowest rate in more than two years, stoking concerns about a possible slowdown for the country’s economy, according to Bloomberg. On Monday, the People’s Bank of China reported that loans in the country we down to 551.6 billion yuan, which was well below the economists’ forecast of 650 billion yuan and down from 639 billion yuan one year earlier. Additionally, the M2 money supply was up 15.1%, which was the slowest pace since 2008.
The report detailed that new loans in the first five months of the year totaled 3.55 trillion yuan, which was 12% lower than the same period in 2010 and 40% below the level seen in 2009. Tao Dong of Credit Suisse said, “This provides another data point highlighting the growth risk,” adding, “I think the economy is heading to a soft landing in the second half of 2011, but the risk of a hard landing seems to be on the rise.” Slowing consumer spending and rising inflation are also adding to concerns about the state of the world’s second-largest economy.
