Australia: Softness in private credit continues - Westpac

Andrew Hanlan, analyst at Westpac, notes that after the Australia’s private credit grew 0.26% in February, while the annual growth edged lower to 4.2%.

Key Quotes

“Notably, the three month annualised pace for total credit has slipped below 3%, to 2.9%, the weakest result since the post GFC period, 2009 to 2011 - when business credit was contracting.”

“Credit growth has progressively slowed since increasing by 6.6% in 2015, followed by a +5.6% in 2016, +4.8% in 2017 and +4.4% in 2018.”

“Key to this trend has been the housing sector. Housing credit growth has slowed over recent years: from 7.4% in 2015; 6.3% in both 2016 and 2017; to 4.7% in 2018. The latest annual reading is 4.2%.”