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Business credit demand slow in 2012

Business credit demand slow in 2012

(1 August 2012 – Australia) Since the start of the year, business demand for credit has slowed, strongly suggesting a sharp downturn in the pace of economic growth in the first half of 2012. Consumer and commercial data provider Veda's business credit demand index was 4.5 percent over the year to June, down from 8.8 percent in the year ended March.

Veda's general manager for commercial credit and supplier risk, Moses Samaha, said the quarterly index had historically proved to be a good indicator of how the overall economy was travelling.

Index movements correlated with growth in gross domestic product (GDP), investment in machinery and equipment, and building and construction.

'The latest data suggests a softening in the pace of real GDP growth after a very strong March quarter,' Samaha said on Tuesday.

'This could mean that we will see a slowdown in GDP growth in coming quarters.'

Official Australian Bureau of Statistics (ABS) figures show the economy grew at a robust 1.3 percent in the March quarter, leading to annual growth of 4.3 percent, the fastest pace in more than four years.
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