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The latest private sector credit data from the Reserve Bank of Australia 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%).
This follows a spate of other data showing collapsing consumer demand, all of which largely pre-dates the COVID-19 lockdown.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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