27 July 2015, 10:10
The RBA characterizes the current rate of credit growth as "moderate", and
from a purely historical perspective this is correct. However, the 6-plus
percent rate to be rather strong: it is well above nominal GDP growth of 3.1% in
2014 and 1.2% yoy in Q1 2015.
Because nominal GDP growth is primarily depressed by falling export prices, the comparison with nominal GPD may not be the best, but nominal domestic final demand growth was 2.3% in Q1 2015. In other words, the debt to GDP ratio continues to rise.
It appears that private sector credit growth is now stabilizing at this 6-plus percent rate, at least in the short term, ending a two-year period of acceleration. Mortgage growth to owner-occupiers and to housing investors is stabilizing at around 5.7% and a bit over 10%, respectively.
"Despite the RBA's two 25bp rate cuts in the first half of the year, much strengthening is not expected from here. At the same time, any near-term weakening is not expected either given these rate cuts, strong house price dynamics and buoyant housing approvals", says Societe Generale.
The other main component, credit to businesses, has potential to accelerate as non-resource investment strengthens, and this could happen relatively quickly depending on the success of the special depreciation allowance introduced in the latest federal budget.
Other personal credit, is likely to continue to stagnate, but it is too small to make much difference. In June, the annual rate of growth is likely to decline noticeably, but that is only because of a large base effect.
Source : FX-Primus
#AustraliaCreditGrowth
#FX
#Forex
#SaleForex
#StabilizingAt
#RespectableRate
Because nominal GDP growth is primarily depressed by falling export prices, the comparison with nominal GPD may not be the best, but nominal domestic final demand growth was 2.3% in Q1 2015. In other words, the debt to GDP ratio continues to rise.
It appears that private sector credit growth is now stabilizing at this 6-plus percent rate, at least in the short term, ending a two-year period of acceleration. Mortgage growth to owner-occupiers and to housing investors is stabilizing at around 5.7% and a bit over 10%, respectively.
"Despite the RBA's two 25bp rate cuts in the first half of the year, much strengthening is not expected from here. At the same time, any near-term weakening is not expected either given these rate cuts, strong house price dynamics and buoyant housing approvals", says Societe Generale.
The other main component, credit to businesses, has potential to accelerate as non-resource investment strengthens, and this could happen relatively quickly depending on the success of the special depreciation allowance introduced in the latest federal budget.
Other personal credit, is likely to continue to stagnate, but it is too small to make much difference. In June, the annual rate of growth is likely to decline noticeably, but that is only because of a large base effect.
Source : FX-Primus
#AustraliaCreditGrowth
#FX
#Forex
#SaleForex
#StabilizingAt
#RespectableRate
0 Response to "Australia's Credit Growth Stabilizing At A Respectable Rate"
Thanks for give comment.