Geoffrey Smith 

Investing.com — China’s credit growth slowed in April as a result of COVID-19 lockdowns that lasted for an extended period. This added pressure to an already struggling economy.

From 3.130 billion Yuan in March to 645.4 billion, net dropped to $95.9 billion. This was its lowest point since February 2018. Its low mark is due in large part, lockdowns throughout Shanghai, Jiling and other areas. Nomura analysts have estimated that 300 million Chinese are under mobility restrictions, which includes those in Shanghai’s key port. 

People’s Bank of China blamed the slowdown on supply shortages as well as high raw material prices. China is now the biggest importer of crude oil in the world. Oil prices have shot up since Russia’s invasion. 

China’s largest credit aggregate also saw a sharp decline to levels not seen since March 2020. The 910 billion yuan was half of the 2.15 trillion expected, and 80% lower than March’s 4.65 million.

These numbers highlight the difficulties that Chinese authorities have in rehabilitating an already fragile economy following the collapse of the real estate bubble. Shimao was one of the largest Chinese developers and said that it had lost 76% in contracted sales over the past year.

According to Activity Surveys, both services and manufacturing saw contractions last month. Both the International Monetary Fund (IMF) and private-sector economists cut their projections for Chinese growth in 2018 well below the Beijing official goal of 5.5%. According to the IMF, growth is expected at 4.4%. However, Goldman Sachs analysts predict that it will only increase 4.5%.