New bank lending in China jumped far more than expected in May and broader credit growth also accelerated as policymakers try to pull the world’s second-largest economy out of a sharp COVID-induced recession.

Chinese banks extended 1.89 trillion yuan ($282.62 billion) in new yuan loans in May, nearly tripling April’s total and easily beating expectations, according to data released Friday by the People’s Bank of China. . Analysts polled by Reuters had predicted new yuan lending would climb to 1.3 trillion yuan in May from 645.4 billion yuan in April and 1.5 trillion yuan a year earlier.

“Credit growth was stronger than expected last month and is expected to accelerate further following the clear signal in late May that policymakers want banks to increase lending,” Capital Economics said in a note. “Further easing is likely. But private sector credit demand is expected to remain subdued as, under current fiscal plans, local government borrowing is set to slow. A dramatic increase in credit growth still seems unlikely.

New household loans, including mortgages, hit 288.8 billion yuan in May, after contracting 217 billion yuan in April, while new business loans soared to 1.530 billion yuan in May from 578.4 billion yuan in April. However, 38% of new monthly lending was in the form of short-term bond funding, down from 80% in April but still above 10% in the first quarter, suggesting that real credit demand remains weak.

Chinese policymakers have recently stepped up support for the slowing economy as Shanghai and other cities ease tough COVID-19 lockdowns following a drop in new infections. The cabinet announced a set of policy measures last month, including broader tax credit refunds and the deferral of social security payments and loan repayments to support businesses.

Local media also reported last month that financial authorities had asked commercial banks to speed up lending. In May, the central bank slashed its benchmark mortgage rate by a surprisingly wide margin, its second cut this year, in a bid to redress the contraction in the housing market, a key driver of economic growth.

But analysts say banks and potential borrowers remain cautious in case there are further virus disruptions. After discovering a handful of new cases, Shanghai’s Chinese mall will lock down millions of people for mass COVID-19 testing this weekend – just 10 days after lifting a grueling two-month lockdown – troubling residents and raising concerns about a further blow to businesses.

MORE POLICY EASING UNDERWAY Premier Li Keqiang has pledged to deliver positive economic growth in the second quarter, although many private sector economists have forecast a contraction.

China will increase the credit quota for political banks by 800 billion yuan ($120 billion) to support infrastructure construction, state broadcaster CCTV said citing a cabinet meeting. M2 broad money supply rose 11.1% from a year earlier, central bank data showed, above Reuters poll estimates of 10.4%. M2 increased by 10.5% in April compared to a year ago.

Outstanding yuan loans rose 11.0 percent in May from a year earlier, compared with 10.9 percent growth in April. Analysts were expecting growth of 10.7%. Growth in the total stock of social finance (TSF), a broad measure of credit and liquidity in the economy, accelerated to 10.5% in May from 10.2% in April.

Chinese provinces are rushing to issue hundreds of billions of dollars in special bonds in June, rushing investments to revive the slowing economy. Analysts and political insiders expect China to issue special treasury bills later this year to maintain a steady flow of funding.

The TSF includes forms of off-balance sheet financing that exist outside of the conventional bank lending system, such as initial public offerings, trust company loans, and bond sales. In May, TSF jumped to 2.790 billion yuan from 910.2 billion yuan in April. Analysts polled by Reuters had expected a May TSF of 2.02 trillion yuan.