Australian credit grew at a snail’s pace for the third month in a row in August.
Total credit provided to the private sector by banks and other lenders rose by 0.2 per cent in August after rises of 0.3 per cent in June and 0.2 per cent in July.
Over the year to August, total credit rose by 4.1 per cent, figures from the Reserve Bank of Australia (RBA) on Friday showed.
A year earlier, the annual growth rate was 3.0 per cent, but the acceleration from one year to the next appears to have stalled.
Growth over the three months to August came in at 2.8 per cent at an annualised rate compared with a 5.7 per cent pace in the previous three months, February to May.
Credit grew a 10 per cent or more per year from mid-2002, after the global recession induced by the high-tech share price crash, right through to late 2008, when the global financial crisis ended the credit party.
So the current pace of growth is still very much on the slow side.
The RBA said in its Financial Stability Review on Tuesday that “consolidation of household balance sheets” was desirable from the point of view of financial stability.
Even so, the figures still suggest the economy, at least outside the mining sector, is dawdling.
As such, the figures add marginally to the case for lower interest rates on Tuesday, when the RBA’s board is due to hold its monthly monetary policy meeting.
In the minutes of its previous meeting, the RBA said the benign inflation outlook gave it scope to cut interest rates in the event of “any significant deterioration in the outlook for growth”, although it’s unclear whether such a deterioration has occurred in the ensuing four and half weeks.