Australia: Private sector credit data preview - Westpac

Research Team at Westpac, notes that the Australia’s credit to the private sector grew by only 0.2% in June, to be 6.2% higher than a year ago.

Key Quotes

“Weakness was centred on business credit, which declined by 0.2%, ahead of the Federal election. Also, housing was relatively subdued at +0.5%.

For July, we anticipate another soft result, a gain of 0.3%. Lending to business fell away in the lead-up to the Election as firms awaited greater clarity around public policy. That points to a soft spot in business credit.

Housing will receive a boost from lower rates, with the RBA easing policy in May and again in August, although mortgage rates declined by less that the cash rate. Prior to this, housing credit growth had slowed in response to tighter lending conditions, to be 5.8% annualised in the June quarter, moderating from 7.6% in the September quarter 2015.”