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:
Loan approvals have started to rise again, even before we have seen the full effects of RBA and APRA easing.
Credit conditions have eased materially of late, with our proprietary credit conditions index pointing to further acceleration in loan approvals growth.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
