Business borrowing remains weak while housing credit continues to edge up, according to the latest lending aggregates released by the Reserve Bank.
Total credit provided to the private sector by financial intermediaries rose 0.2 per cent in June, following a 0.5 per cent increase in May, the RBA said. Economists had been expecting credit to rise 0.4 per cent.
Over the year to June, total credit rose by 2.8 per cent.
The lending figures underscore the patchy nature of the economy's recovery with businesses continuing to be reluctant to borrow - or struggling to obtain finance from banks. Other indicators of the recovery's weakness include this week's release of June quarter consumer price inflation data, which came in lower than expected by economists and all but eliminated the prospect of another rise in official interest rates by the Reserve Bank at next week's board meeting.
Housing credit rose 0.4 per cent in June and increased 8.2 per cent over the year, seasonally adjusted, the RBA said.
Credit in the housing sector rose over June due to growth in lending to both owner-occupiers and investors, the central bank said.
Other personal credit fell 0.3 per cent in June and was up 3.1 per cent over the year.
Business credit was flat in June, to be down by 5.0 per cent from a year earlier, the RBA said.
AAP with Reuters
Business borrowing drags on credit growth
July 30, 2010
