Credit growth ticks up

Johannesburg - Credit extension to the private sector (PSCE) grew at a rate of 8.73% year-on-year (y/y) in April from 8.51% in March, the South African Reserve Bank (Sarb) said on Thursday.

The rate of growth of South Africa's broad M3 money supply measure rose by 8.83% in the year to end-April from 10.58% in the year to end-March.

The rate of growth in credit extension was expected to have increased at 8.4% year-on-year (y/y), according to I-Net Bridge's Econometer. South Africa's broad M3 money supply aggregate growth rate, meanwhile, was expected to have increased at 8.6% y/y.

Forecasts among the 11 economists surveyed for PSCE ranged from 6.8% to 9.2%, while the range of forecasts for M3 was from 7.2% to 9.6% at the top of the range. PSCE was at 20% a year ago, while M3 was at 21%, both providing a statistical high base.

Senior economist at Efficient Group Fanie Joubert said, "Credit extension is slightly higher than expected, but if you look at the level at which it is rising, it is much more acceptable. It is coming from 20% plus and is now at 8.7%. I think the Reserve Bank will not focus that much on this today at it its repo meeting, but more on the inflation and growth debate."

- I-Net Bridge