Recently, the quarterly report on the macro leverage ratio (hereinafter referred to as the “report”) released by the National Finance and Development Laboratory showed that the macro leverage ratio in the first quarter of 2023 rose from 273.2% at the end of 2022 to 281.8%, a total increase of 8.6 percentage points, a significant increase. . Among them, the leverage ratio of non-financial enterprises hit a new high, the leverage ratio of the household sector resumed its upward trend, and the increase in the leverage ratio of the government was relatively small.
How do you view the structural changes in the macro leverage ratio in the first quarter? Next, will the macro leverage ratio continue to rise? In the process of rapid credit growth, can my country’s macro leverage ratio remain stable? The reporter interviewed relevant persons.
Leverage structure continues to improve
The macro leverage ratio is the ratio of a country’s total debt to its gross domestic product (GDP). It is an important indicator to measure a country’s debt level and provides an important decision-making basis for preventing and defusing financial risks and maintaining financial stability. Relevant data show that since 2017, the growth rate of my country’s macro leverage ratio has been generally stable, with an average annual growth rate of about 4.8 percentage points, which is 8.6 percentage points lower than the average annual growth rate from 2012 to 2016. From 2017 to 2019, my country’s macro leverage ratio was generally stable at around 253%, initially achieving the goal of stabilizing leverage. After the outbreak of the new crown epidemic in 2020, the leverage ratio will rise to 280.2% in stages, and will drop to 272.5% in 2021. The overall growth rate is controllable.
Since last year, the macro leverage ratio has increased. In this regard, experts believe that there are many reasons, including the decline in economic growth and the increase in the level of macro leverage. At the same time, government departments strengthen the coordination of financial resources, maintain the necessary expenditure intensity, and provide the necessary financial support for the overall planning of epidemic prevention and control and economic and social development.
Specifically, from a structural point of view, the report shows that in the first quarter of this year, the sector with the largest increase in the macro leverage ratio was still the non-financial corporate sector, which rose by 6.1 percentage points; followed by the residential sector, which rose by 1.4 percentage points; the government sector rose the least, rose by 1.1 percentage points. But only from the perspective of debt growth, the year-on-year growth rate of government debt is still the highest, reaching 13.7%, and the growth rate of government debt is basically stable compared with last year.
“The year-on-year growth rate of government sector debt is the highest, and the increase in the macro leverage ratio is relatively slow, which fully reflects the appropriate expansion of the central fiscal deficit, and the early issuance, early use, and early effect of local government special bonds.” JLL Greater China Chief Economist Pang Ming, an expert and director of the research department, believes that next, we must focus on improving quality, expanding capacity, and increasing efficiency, clarifying key areas of support and optimizing the investment of special debt funds, improving the efficiency of the use of special debt funds, and maintaining the financial resources needed to stabilize the economy. Expenditure intensity and the multiplier effect of fiscal funds, while effectively stabilizing fluctuations in government debt, alleviating local financial debt repayment pressure, and preventing and defusing potential debt risks.
Since the third quarter of 2020, the leverage ratio of the resident sector has fluctuated around the level of 62%. Until the first quarter of this year, the leverage ratio of residents once again showed a certain increase. “The increase in the leverage ratio of residents is mainly driven by consumer loans and personal business loans. In the case of a relatively loose credit environment, residents’ willingness to increase leverage has also increased. The leverage ratio of the household sector will continue to rise in the future.” The report said. Analysis.
The debt growth of non-financial companies returned to the level of 10.3%, reflecting the overall relaxed credit environment, which aims to help companies overcome capital constraints and drive economic growth through increased investment. “Compared with the previous two years, the leverage ratio has risen significantly, especially the corporate sector’s leverage ratio has risen rapidly, because overall, my country’s financing method is dominated by indirect financing, and the total amount of new bank loans in the first quarter hit a new high , Promoting a significant increase in the leverage ratio. The corporate sector is mainly the growth of medium and long-term loans, and the household sector is the growth of short-term loans and medium- and long-term operating loans.” said Lou Feipeng, a researcher at Postal Savings Bank of China.
In recent years, my country’s leverage structure has continued to improve. The financing of the corporate sector has been continuously standardized, and the leverage ratio has remained basically stable. At the same time, the debt structure of the corporate sector has been continuously optimized: first, loans and bonds have continued to grow, effectively supporting the financing needs of the real economy; The new debt creates space. The leverage of the government sector first decreased and then increased, effectively coping with the impact of the epidemic. The growth rate of the leverage ratio of the household sector was stable, and the debt structure was continuously optimized.
Relevant estimates show that the leverage ratio of my country’s resident sector has risen from 33.8% in 2012 to 72.2% in 2021. The average annual growth rate in these nine years has been 4.3 percentage points, and the increase has not fluctuated much over the years. The debt structure of the household sector has been continuously optimized: First, the policy-supported personal inclusive small and micro business loans have grown rapidly, and second, the overall growth rate of housing loans has slowed down.
The current rise is seasonal
Since the macro leverage ratio is the ratio of total debt to GDP, in recent years, with the increase in fluctuations in economic growth, the macro leverage ratio has also experienced rapid rise and fall. For example, the impact of the epidemic in the first half of 2020 led to negative growth in my country’s GDP. Affected by this, the macro leverage ratio also experienced a rapid rise in stages; for another example, in 2021, my country’s economy will recover rapidly, and the GDP growth rate in the first half of the year will be nearly 13%. The rate also dropped accordingly.
There are certain seasonal reasons for the current rebound in the macro leverage ratio. According to Ruan Jianhong, Director of the Survey and Statistics Department of the People’s Bank of China, from the perspective of historical data, changes in the macro leverage ratio have very obvious seasonal characteristics. Often, the first quarter rebounds more than the previous year, and the growth rate is the same as that of all quarters throughout the year. First, the seasonal characteristics are closely related to the seasonal characteristics of credit supply and economic growth.
“In recent years, in the new debt of the non-financial sector, the proportion of new loans has basically remained above 70%, so the pace of loan issuance has a relatively obvious impact on the changes in the macro leverage ratio.” Ruan Jianhong further explained, a The quarter is the peak of credit issuance. The proportion of new loans in the first quarter of 2021 to 2022 will account for about 40% of the annual loans. During the same period, due to the influence of the Spring Festival, the scale of GDP in the first quarter is often at the lowest level in all quarters of the year. In other words, the two seasonal characteristics of the quarterly high credit supply and the quarterly low GDP growth superimposed on each other, resulting in a relatively large increase in the macro leverage ratio in the first quarter. In addition, in the first quarter of this year, the economy is still in the process of recovery, the financial system has increased its support for the real economy, and factors such as pre-issued government bonds have also strengthened the seasonal characteristics of the macro leverage ratio.
Economic growth, especially nominal economic growth, is a key factor determining the current macro leverage ratio trend. Lou Feipeng said that from the perspective of changes in the leverage ratios of countries around the world, it is generally easy to get up and difficult to get off, and the level of economic development and leverage ratios are positively correlated. Judging from the history of changes in my country’s leverage ratio, it also presents certain seasonal characteristics. In the first quarter, banks increased their loans to serve the real economy in accordance with the idea of early investment and early return, resulting in a relatively more obvious increase in the leverage ratio in the first quarter of each year. From this point of view, the subsequent leverage ratio may increase, but the rate of increase will decrease.
The growth of social debt has basically remained stable, and the low nominal economic growth rate is the main reason for the increase in the macro leverage ratio. Pang Ming believes that since the beginning of this year, the effect of the policy on stabilizing growth and the upward trend of the macro economy are more obvious, and positive signals in all aspects are continuously accumulating and appearing. However, since the nominal economic growth rate is still lower than that of the whole society’s debt growth rate, the macro leverage ratio has risen steadily. In the next stage, we should continue to maintain the stability, continuity, flexibility, and precision of macro policies, continue to boost the confidence and expectations of business entities, and continue to accelerate the continued overall improvement of economic operations.
Will remain basically stable throughout the year
It should be noted that my country’s economic recovery and development momentum is now sound, which will help the macro leverage ratio remain basically stable throughout the year. Experts said that although there are still many uncertainties in the internal and external environment, my country’s economy has strong resilience, great potential, and sufficient vitality, and the fundamentals of long-term improvement will not change. As the effects of a package of policies and subsequent measures to stabilize the economy continue to emerge, effective prevention and resolution of major financial risks, and continuous deepening of financial reform and opening up, the economic recovery will be further consolidated, and the endogenous growth momentum will continue to increase. my country’s macro leverage ratio will continue to maintain basically stable.
Pang Ming said that in the first quarter, as the financing needs of market entities continued to recover, financial support for the real economy was effectively expanded, banks’ credit initiative increased, loan interest rates and corporate financing costs maintained a downward trend, and supply-side and demand-side factors jointly promoted The leverage ratio of non-financial companies has steadily increased. At the same time, we should pay attention to transforming the strong and effective credit support into the acceleration of investment in the corporate sector, especially the increase in the growth rate of private investment, and transform the reasonable and sufficient liquidity into precise drip irrigation and structural optimization of key areas and weak links.
The report believes that in an environment where the growth rate of the general price level is relatively low, higher real economic growth is required to reduce the growth rate of the macro leverage ratio. Judging from the debt level of the whole society, its growth is relatively restrained. The “strengthening and improving efficiency” of fiscal policy requires government departments to expand fiscal deficits and increase leverage more actively. Therefore, it is difficult for the growth rate of the whole society’s debt to decrease in the short term. Increasing debt to stimulate consumption and investment is a necessary means for current counter-cyclical adjustments.
“The extent to which economic growth can be stimulated through these counter-cyclical adjustment measures determines how much the macro leverage ratio will increase in the future.” The report said.
Lou Feipeng believes that leverage has the function of time and space allocation of capital resources, and there is no distinction between good and bad in itself. The normal and reasonable application of leverage is conducive to promoting economic development, while exceeding the normal and reasonable range is not conducive to promoting economic development. “Maintaining the macro leverage ratio Basic stability does not mean controlling the leverage ratio, but maintaining a reasonable increase in the leverage ratio, investing more capital resources in areas with higher capital utilization efficiency, promoting high-quality economic development, and ultimately achieving stability in high-quality development macro leverage ratio”.
2023-06-06 03:32:00
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