August Financial Data Released: M1 Growth Rate Continues to Rebound Corporate Loan Growth and Personal Loan Growth Show Signs of Improvement

    Today, the People's Bank of China released August financial data. Figures show that by the end of August 2025, the broad money supply (M2) stood at 331.98 trillion yuan, marking an 8.8% year-on-year increase. The narrow money supply (M1) reached 111.23 trillion yuan, up 6% year-on-year. The currency in circulation (M0) totaled 13.34 trillion yuan, rising 11.7% year-on-year. Net capital injection for the first eight months reached 520.8 billion yuan.

    Regarding social financing, data shows that by the end of August 2025, the outstanding balance of social financing stood at 433.66 trillion yuan, up 8.8% year-on-year. Among this, the outstanding balance of RMB loans to the real economy reached 265.42 trillion yuan, increasing by 6.6% year-on-year. From January to August 2025, the cumulative increase in the total social financing scale reached 26.56 trillion yuan, exceeding the same period last year by 4.66 trillion yuan.

    “Whether it's M2 reflecting loose monetary policy or the total social financing scale reflecting loose credit conditions, their year-on-year growth rates have both remained between 8% and 9%. This indicates that the monetary policy stance is supportive,” an authoritative expert told a reporter from the Financial Times.

    Financial aggregates maintain high growth rates, with M1 growth rebounding

    “At the end of August, the year-on-year growth rates of both social financing and M2 remained at relatively high levels, aligning with and slightly exceeding the expected targets for economic growth and overall price levels,” The expert told the reporter that since the beginning of this year, a more proactive fiscal policy and moderately loose monetary policy have worked in tandem. Government bond issuance has been accelerated and scaled up, with cumulative incremental financing consistently exceeding the same period last year, providing solid support for the growth of social financing.

    Data shows that in the first eight months of this year, net financing from government bonds reached 10.27 trillion yuan, an increase of 4.63 trillion yuan year-on-year. Market institutions estimate that cumulative issuance of ultra-long-term special treasury bonds reached 996 billion yuan from January to August, with issuance progress nearing 80%.

    Increased fiscal policy support, coupled with reasonable growth in both social financing and loans, has provided some backing for M2 growth. Additionally, the relatively low M2 base from the same period last year has contributed to the current higher M2 growth rate.

    Authoritative experts interpreted.

    Notably, M1 growth has continued to rebound. Data shows the narrow money supply (M1) balance reached 111.23 trillion yuan, up 6% year-on-year. “The upward trend in M1 growth has driven the M1-M2 gap to narrow further,” said the aforementioned expert, noting it has now reached its lowest level since June 2021.

    Market analysts also told the Financial Times that “the M1-M2 gap has narrowed significantly this year, with more funds converting into demand deposits, which facilitates economic activities such as consumption and investment.”

    Both corporate and personal loan growth provided a boost

    Regarding loans, at the end of August, the balance of RMB loans stood at 269.10 trillion yuan, up 6.8% year-on-year. Structurally, inclusive micro-enterprise loans totaled 35.20 trillion yuan, up 11.8% year-on-year, while medium-to-long-term manufacturing loans reached 14.87 trillion yuan, rising 8.6% year-on-year.

    “Some enterprises' loan growth benefits from a rebound in production activity,” a client manager at a bank branch in an eastern province told Cailian Press. Manufacturing loan reserves and disbursements have significantly outperformed last year, From January to August this year, new manufacturing loans accounted for 53% of the bank's new corporate loans, a substantial increase of 33 percentage points compared to the full year of 2024. Advanced manufacturing sectors, particularly high-tech manufacturing and equipment manufacturing, have shown strong momentum, with enterprises demonstrating significant new financing needs, providing robust support for credit growth.

    The aforementioned authoritative expert also analyzed for the reporter that recent surveys indicate industries like textiles and apparel, specialized equipment, and computer communications are operating at relatively high levels of prosperity. Correspondingly, investment and financing demand remains robust, driving credit growth.

    “The current period is the peak season for Christmas orders. Companies are actively expanding into emerging markets like Southeast Asia and South America. At this critical juncture where enterprises seek to diversify their operations, financing needs are being fully met,” " a Christmas goods processing enterprise in Yiwu, Zhejiang Province, told the reporter.

    While corporate lending has shown signs of recovery, personal loan growth has also received a boost. Data indicates that RMB loans increased by 13.46 trillion yuan in the first eight months. By sector, household loans rose by 711 billion yuan, with short-term loans decreasing by 372.5 billion yuan and medium-to-long-term loans increasing by 1.08 trillion yuan.

    Market analysts told the Financial Times that August is traditionally a peak season for summer consumption. Personal consumption demand, combined with consumption-boosting policies such as “trade-in” initiatives, further unleashed consumer demand and increased loan demand.

    Since August, cities including Beijing, Shanghai, and Shenzhen have successively introduced comprehensive real estate regulation packages, encompassing measures such as relaxing purchase restrictions in non-core areas and adjusting personal housing credit policies. When discussing the loan data, the aforementioned authoritative expert noted that the introduction of these comprehensive real estate regulation policies better meets both rigid housing demand and diverse improvement-oriented housing needs.

    Taking Shanghai as an example, according to data from the Shanghai Municipal Housing Administration Bureau, just one week after the introduction of the “Shanghai Six Measures” real estate policy, Shanghai's real estate transaction volume increased significantly compared to before the policy, driving the volume of commercial housing transactions in August to turn positive month-on-month. Local banks reported a rebound in residential home purchase demand, leading to a noticeable increase in mortgage loan inquiries and signed contracts.

    Regarding loan interest rates, central bank data shows that in August, the weighted average interest rate for new corporate loans was approximately 3.1%, about 40 basis points lower than the same period last year. The weighted average interest rate for new personal housing loans was also around 3.1%, about 25 basis points lower than the same period last year.