M2 Growth Slows in October, TSF Still Growing

M2 grew 0.21 percent in October, the third slowest monthly increase in 2016. Thanks to favorable yoy comparison, M2 12-month growth increased from 11.58 percent to 11.64 percent.

The 3-month growth rate in M2 was 7.7 percent, well ahead of the 2.3 percent growth rate in October 2015.

M2 growth began accelerating in November 2015. Given the tightening in the real estate market alone, I expect M2 growth will not match last year's increase. A credit driven slowdown is coming unless the government forces more credit into the system.