The latest private sector credit data from the Reserve Bank of Australia, released last week, revealed that the stock of personal credit, which was already in terminal decline, collapsed by 12.1% in the year to July – the biggest plunge in recorded history:
As shown above, this decline in personal credit growth dwarfs the troughs of the GFC (-7.8%) and the early 1990s recession (-6.0%).
Yesterday’s Lending Indicators data from the Australian Bureau of Statistics (ABS) supported these findings, revealing that annual personal finance commitments have collapsed:
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