(2 February 2009 – Australia) Lending to the private sector fell in the final month of 2008, the first time that RBA’s total lending figure has fallen since December 1992.Total credit provided to the private sector by financial intermediaries fell by 0.3 percent over December 2008, following a rise of 0.4 per cent over November.
Despite the monthly fall, total credit during the entire year rose by 6.7 percent.
While the yearly rise compares well to the fall in December, growth has softened significantly since the peak at end of 2007. In December 2007 growth was 16.4 percent, the highest level since 1989.
The monthly fall in total credit was caused primarily by a fall in business lending, which was down 1.1 percent for the month, despite finishing the year at a reasonable 8.0 percent.
The fall in business lending reflected a fall in foreign currency denominated lending over the month, the RBA said.
It has been just over five years since business lending last fell, with a 0.5 percent drop in February of 2004.
Housing credit, including both owner occupier and investor lending continued to grow, however personal lending was down both this month, and over the last year.