Adelaide Timbrell, Senior Economist at ANZ Bank offers a brief analysis of Australia's credit growth and forecasts a sharper slowdown in economic growth through 2023.

Key Quotes:

“Private sector credit grew 0.5% m/m in November, in line with market expectations. This is yet another sign of caution in the economy as higher interest rates and inflation bite for both households and businesses. Our new forecasts show a sharper slowdown in economic growth through 2023.”

“Housing credit grew just 0.4% m/m in November, the same as in October but lower than the 0.5% m/m average in Q3 and 0.6% m/m average in Q2. Falling housing prices off the back of reduced borrowing capacity is behind this.”

“Business credit slowed to 0.7% m/m in November versus 0.8% m/m in October and an average of 1.3% m/m in Q3. With higher interest rates, it’s unlikely that this is due to businesses paying down debt faster and implies caution in new lending flows.”

“Personal credit grew 0.2% m/m, which doesn’t change our view on household spending appetite. ANZ-observed spending to 18 December shows a sluggish spending pulse leading up to the Christmas peak.”