Private sector credit is bottoming

Via Damien Boey of Credit Suisse on yesterday credit aggregates:

Private sector credit was materially softer than expected, barely rising 0.1% in June, with downward revisions to prior months’ data. Year-ended growth has slowed to 3.3% from 3.6%. Compositionally, weakness in business and personal credit lines underpinned the downside surprise. The story here seems to be about global uncertainties weighing on business confidence, and a distinct lack of consumer confidence.

Notwithstanding the downside surprise, we are optimistic that credit growth is in the process of bottoming out, because:

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