BEIJING (Reuters) -New bank lending in China nearly doubled in September from the previous month and far exceeded expectations after the central bank acted to spur an economy weakened by a property crisis and a resurgence of COVID-19 cases.

Chinese banks extended 2.47 trillion yuan ($344.58 billion) in new yuan loans in September, jumping from 1.25 trillion yuan in August, data released by the People’s Bank of China showed on Tuesday.

Analysts polled by Reuters had predicted new yuan loans would rise to 1.80 trillion yuan in September. The new loans also exceeded 1.66 trillion yuan a year earlier.

Policymakers are gearing up to consolidate a recovery in the world’s second-largest economy, which narrowly escaped a contraction in the second quarter, as COVID flare-ups and a deepening property slump weigh on the outlook.

“Expanded credit for infrastructure, manufacturing, real estate and other sectors will give a strong support for growth of credit and total social financing in the fourth quarter, helping to keep the economic operation within a reasonable range,” said Wen Bin, chief economist at Minsheng Bank.

Household loans, including mortgages, rose to 650.3 billion yuan in September from 458 billion yuan in August, while corporate loans rocketed to 1.92 trillion yuan from 875 billion yuan, central bank data showed.

New yuan loans totalled 18.08 trillion yuan in the first nine months, rising 1.36 trillion yuan from a year earlier, central bank data showed.

The central bank said in late September that it would increase efforts to consolidate an economic recovery, citing risks to the global economy and pledging to implement prudent monetary policy and to keep liquidity ample.

In August, the central bank cut the one-year loan prime rate (LPR), its benchmark lending rate, by 5 basis points, and lowered the five-year LPR by a bigger margin.

The central bank in September also lowered the interest rate for housing provident fund loans by 15 basis points for first-time home buyers from Oct. 1, in a bid to prop up the embattled property market.

Broad M2 money supply in September grew 12.1% from a year earlier, central bank data showed, in line with analysts’ forecasts in a Reuters poll. It rose 12.2% in August.

Outstanding yuan loans grew 11.2% in September from a year earlier, compared with 10.9% growth in August, which was in line with expectations.

BROAD CREDIT GROWTH QUICKENS

The central bank faces limited space to ease policy further due to worries over capital flight, as the U.S. Federal Reserve and other major central banks aggressively raise interest rates in a bid to put a lid on soaring inflation.

Chinese authorities are doubling down on an infrastructure push, dusting off an old playbook by issuing debt to fund big public works projects to revive the economy.

Local governments issued a net 3.52 trillion yuan in special bonds in the first eight months, the finance ministry data have shown, as authorities accelerated special bond issuance for infrastructure.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 10.6% in September, up from 10.5% in August.

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 September, TSF rose to 3.53 trillion yuan from 2.43 trillion yuan in August. Analysts polled by Reuters had expected September TSF of 2.73 trillion yuan.

($1 = 7.1682 Chinese yuan renminbi)