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Credit growth bounces back in December

Credit growth bounces back in December

(04 February 2013 – Australia) The value of credit provided to the private sector posted a solid rise in December after business borrowing bounced back after two monthly falls. The rise of 0.4 percent, seasonally adjusted, was reported by the Reserve Bank of Australia (RBA) – the last time a bigger rise in total credit was recorded, was in September 2011.

The latest gain follows two months of stagnation in lending; credit had risen only 0.1 percent in October before stalling completely in November.

As a result, growth through the December quarter of 2012 was 2.2 percent on an annualised basis, decelerating from 3.1 percent in the previous three months and a 4.9 percent pace in the three months before that.

The monthly bounce in December was mainly the result of a recovery in business credit, up by 0.7 percent in December after falls of 0.3 percent in October and 0.7 percent in November.

Business credit growth was 2.8 percent through 2012, marginally faster than consumer price inflation, but all that growth was recorded in the first half.

Annual growth in housing credit slowed from a modest 4.6 percent over the year to November to a slightly more modest 4.5 percent over the year to December.

Other personal credit neatly reversed November's 0.2 percent fall in December, but was still down by 0.3 percent through the year after falling by 1.3 percent in 2011.

Aside from fluctuations around a weak trend in the more volatile business credit category, the figures show no sign that credit growth is being revved up by the interest rate cuts over the past couple of years.
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