New bank lending in China unexpectedly rose in December from the previous month, central bank data showed on Tuesday, with 2022 setting a record high for lending as the central bank continued to support the COVID-ravaged economy.

Chinese banks extended 1.4 trillion yuan ($206 billion) in new yuan loans in December, up from November and beating analysts’ expectations, according to data released by the People’s Bank of China.

Analysts polled by Reuters had predicted new yuan loans would drop to 1.1 trillion yuan in December from 1.21 trillion yuan the previous month. The new loans were also higher than 1.13 trillion yuan a year earlier. “China’s new loans beat expectations for December while aggregate financing missed,” said Zhou Hao, chief economist at brokerage house Guotai Junan International. “The market had a low expectation as the virus resurgence should have dampened credit activities.”

He said that investors’ eyes have now turned to data for credit extensions in the first month of the year.

“As new loans came in higher than expected in December, there’s a big hope of massive loan extension at the beginning of 2023, further boosting growth prospects,” he said.

Household loans, including mortgages, fell to 175.3 billion yuan in December from 262.7 billion yuan in November, while corporate loans rose to 1.26 trillion yuan from 883.7 billion yuan, according to central bank data.

New bank lending hit a record 21.31 trillion yuan in 2022, up from 19.95 trillion yuan in 2021 - the previous record.

Chinese leaders have pledged to increase support for the world’s second-largest economy, which was hit hard by COVID-19 lockdowns last year as well as slowing global demand. After tough virus curbs were abruptly lifted in December, the country is now battling a surge of infections.

The central bank has promised to make its policy “precise and forceful” this year to support the economy, keeping liquidity reasonably ample and lowering funding costs for businesses.

Broad M2 money supply grew by 11.8 per cent in December from a year earlier, central bank data showed, below estimates of 12.2 per cent forecast in the Reuters poll. M2 grew 12.4 per cent in November from a year earlier.

Outstanding yuan loans grew by 11.1 per cent in December from a year earlier compared with 11.0 per cent growth in November. Analysts had expected 11.0 per cent growth.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 9.6 per cent in December from a year earlier and from 10.0 per cent in November.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In December, TSF fell to 1.31 trillion yuan from 1.99 trillion yuan in November. Analysts polled by Reuters had expected December TSF of 1.60 trillion yuan.