China’s central bank kept its loan prime rates steady on Monday, maintaining stability despite weak economic data and an extended slump in the property sector. The People’s Bank of China (PBOC) held its 1-year and 5-year loan prime rates unchanged at 3% and 3.5%, respectively. This marks the seventh consecutive meeting with no change, aligning with a Reuters survey.
The 1-year rate serves as a benchmark for new loans, while the 5-year rate helps determine mortgage rates. The decision comes amid disappointing economic indicators from China for November, including lower-than-expected retail sales and industrial output.
Retail sales rose 1.3% year-over-year last month, significantly missing Reuters’ median forecast of 2.8% growth. This also marks a slowdown from the 2.9% increase recorded in the previous month. Similarly, industrial production climbed 4.8% in November compared to a year earlier, falling short of the anticipated 5% rise and representing its weakest growth since August 2024.
China continues to grapple with a prolonged downturn in its real estate sector. Fixed asset investment—which includes property—contracted 2.6% between January and November compared to the same period last year, a steeper decline than the 2.3% drop expected by economists. New home prices continued to decrease in November, highlighting ongoing challenges in the property market. Prices of new homes in tier-1 cities such as Beijing, Guangzhou, and Shenzhen fell by 1.2%, while resale home prices dropped 5.8% year-over-year.
Earlier this month, China’s finance ministry announced plans to issue ultra-long-term special government bonds in 2025. The funds raised will support the construction of key projects and new infrastructure initiatives aimed at stimulating economic growth.
The country is also facing deflationary pressures. Policymakers have pledged to “vigorously support the implementation of special actions to boost consumption” in response.
Additionally, an interim trade deal with the United States, which suspends prohibitive tariffs on Chinese exports, could enhance shipments to the U.S. This development may help China achieve its goal of around 5% economic growth in 2025.
CNBC’s Anniek Bao contributed to this report.
https://www.cnbc.com/2025/12/22/china-lpr-1-year-5-year-property-market-weak-economic-data-.html