• Wealth and poverty

    True riches would be to create a safe and satisfied community for all South Africans.

  • SABC shenanigans

    SA has already embarked on a slippery slope to autocracy, warns Terry Bell in Inside Labour.

  • Zim tastes people power

    Protests in Zimbabwe are forcing Mugabe to face anti-government sentiment, says Memory Mataranyika.

All data is delayed
Loading...
See More

August credit growth slows

Sep 28 2012 08:34
Reuters

Johannesburg - Growth in credit demand by South Africa's private sector slowed to 7.93% year-on-year in August compared with an 8.34% rise in July, central bank data showed on Friday.

Growth in the broadly defined M3 measure of money supply also braked to 7.78% year-on-year after rising by 8.26% in July.

Economists surveyed by Reuters forecast year-on-year private sector credit growth of 7.95% in August while M3 was seen expanding by 7.65%.

Citadel economist Salomi Odendaal said: “There’s still very slow growth in the mortgage demand, the housing market or sections of it is still struggling. The growth in credit to households is picking up slowly ... but it’s not near the boom times that we’ve seen before so I think there are still pretty cautious in borrowing and there are indications that quite a number of households are having trouble in servicing debt especially the middle to lower income sectors.

“Growth in credit to businesses seems to have come down a little bit recently and it’s mainly a lack of confidence in strong demand.

“Overall credit growth in South Africa is picking up slowly but it’s still in line with the current interest rate policy of the Reserve Bank,” Odendaal said.

The rand was weaker at R8.2495 against the dollar at 06:40 GMT from R8.2260 before the data was released at 06:00 GMT. The yield on the 2015 bond edged up to 5.355% from 5.35% but that for the 14-year bond dipped to 7.365% from 7.38%.

Credit demand growth has been in positive territory since May 2010, although its recovery has been somewhat constrained by high unemployment and an uncertain outlook for companies.

The ratio of household debt to disposable income remains extremely high at more than 76% while unemployment remains around 25%.

The Reserve Bank’s benchmark repo rate is at a four decade low of 5% but despite this, heavily indebted households are somewhat reluctant to borrow more.


*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

 
credit growth  |  sa economy

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about:

THE SAVINGS ISSUE

Saving can make a lot of things possible, but we all know how hard it is to save. This special Savings Issue will help you get focused.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Sarb's decision to keep the repo rate unchanged is:

Previous results · Suggest a vote

Loading...