Data released by the central bank Tuesday showed a larger-than-expected rise in credit in June, tempering anxiety over weak second-quarter growth data, which is set to be released on Wednesday.

However, a sustained rise in overall credit growth might be less likely in the second half of the year, as actual loan demand will probably remain subdued as long as growth remains relatively sluggish.

With an 11.8 percent increase year-on-year by the end of June, the M2 money supply still came in just under the yearly target of 12 percent.

The figure, nevertheless, has been on an upward trend since April, when the growth rate fell to a record low of 10.1 percent year-on-year.

A flurry of cuts in both interest rates and banks' reserve requirement ratio are among the reasons for the rise in money supply, Sheng Songcheng, head of the statistics department at the People's Bank of China (PBC), the country's central bank, said on Tuesday, news portal chinanews.com reported.

A breakdown of the credit data shows robust growth in medium- to long-term loans in the first half of the year, indicating strong growth potential.

There was also a jump in bill financing, a short-term financing instrument, which signifies an increase in business activities, Sheng said.

The PBC official's remarks will surely ease concerns over the outlook for the world's second-largest economy, even if it records expansion of below 7 percent for the second quarter amid weak fixed-assets investment growth.

Meanwhile, uncertainty over credit growth in the rest of the year is correlated with concerns over when the economic slowdown will bottom out.

Impressive credit growth is essentially driven by strong loan demand.

While a raft of pro-growth measures that have been announced by the government over the past few months have spurred inventory replenishing by many enterprises, thus boosting actual loan demand, continuing worries about the economic slowdown are likely to hold off any conspicuous rise in loan demand in the near future. 

Also, the money supply has been increasing partly as a consequence of more cash being funneled into the market, following government efforts to support growth through policy easing.

For the country to continue to ratchet up money supply there would have to be continued cash flows into the market, which seems less likely in the second half of the year as the government recently repeated pledges to focus more on targeted fine-tuning, suggesting a move away from wide-ranging actions to boost credit.

Liquidity support recently promised by the central bank to help stem the country's stock market rout might also have an impact on the supply of money extended to individuals and enterprises.

Nonetheless, even if strong growth in credit is unlikely in the second half of 2015, fiscal measures such as support for local government financing will still help to support overall economic growth.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn