Signal Japan, the UK, China, and France hold currency and deposits above twice GDP

Summary

MGI finds that as of 2025, currency and deposits exceed twice GDP in four economies: Japan, the United Kingdom, China, and France. China recorded the biggest increase over the year, a rise of ten percentage points of GDP. That jump coincided with heavy lending by Chinese banks, especially to companies, since deposits expand when banks extend loans or central banks create base money. The pattern contrasts with most other major economies, where inflation and quantitative tightening have pulled these balances down from their pandemic peaks. The report treats such monetary aggregates as another balance sheet signal of economic health, which makes China's divergence stand out.