By Damien Boey at Credit Suisse
APRA data reveals a moderate 0.1% increase in gross loan balances in January. Seasonality usually dampens January growth numbers by roughly 0.1% – and adjusting for this, it is likely that system credit rose by 0.2% in the RBA’s January numbers. Consensus is looking for 0.3% growth, and so the risk is that the data will surprise slightly to the downside.
The bad news is that the private sector credit impulse is slowing, consistent with the tightening of credit conditions we have seen over the last year or so. Compounding the bad news is the fact that the government fiscal surplus expanded towards the back end of 2018, draining money supply from the system.
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