• Private sector credit rose by 0.3% in April to be 3.1% higher over the year.
• Housing credit increased by 0.4% in April following an increase of 0.4% over March. It is up 4.5% over the year.
• Business credit rose by 0.2% in April after decreasing by 0.1% over March. It stands at a lacklustre 1.4% through the year.
Summary
Private sector credit expanded by 0.3% over April, which was in line with market expectations. Annual credit growth stands at a subdued 3.1% – significantly below the long-run average of just under 12%. Today’s credit data is in line with previous trends showing lacklustre growth in the stock of housing and business debt. Conditions are supportive of credit growth, but appetite for debt is low. Over recent years, both households and businesses have shown a preference for strengthening balance sheets rather than taking on new debt. Strong balance sheets coupled with low interest rates are supportive of credit growth. But uncertainty over the economic outlook and fragile consumer and business sentiment is acting as a drag on credit growth.
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Commonwealth Bank