(MENAFN- AFP) China's bank lending fell sharply in April, the central bank said on Friday, as the government refrained from boosting credit amid concerns over growing risk.
Bank loans reached 555.6 billion yuan ($85.2 billion) in April, down sharply from 1.37 trillion yuan in March, the People's Bank of China (PBoC) said.
The latest figure missed a median forecast of 1.3 trillion yuan in a Bloomberg News survey.
"Following signs of an upswing in the economy, policymakers have refrained from further policy easing in recent months and appear to be shifting their focus back to credit risks and structural reform," Capital Economics said in a research note after the release of the data.
On Monday, the People's Daily newspaper -- the Communist Party's mouthpiece -- cited an unnamed "authoritative" source saying China must turn off the taps of credit-driven growth to avoid a financial system crisis in the face of rising bad loans.
The government has cut interest rates six times since late 2014 and also lowered the ratio of reserves that banks need to set aside, in an effort to boost lending and stimulate the economy.
China's economy grew 6.7 percent year-on-year in the first quarter, its slowest expansion in seven years.
Total social financing -- an alternative measure of credit in the real economy –- slumped to 751.0 billion yuan in April from 2.34 trillion in March, the PBoC said in a separate statement on Friday.
Analysts have lowered expectations for further monetary stimulus given the debt warning and early signs of stabilisation in the economy.
"With further policy easing now looking unlikely, credit growth is likely to begin slowing again next quarter," Capital Economics said.
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