Growth in private-sector credit declined by 0,4% y/y in October, compared with positive growth of 1,5% in September. This is the first annual decline since 1966, and it demonstrates the impact that the recession has had on primary borrowing.
Economists believe the introduction of the National Credit Act and tighter lending criteria are also partly to blame for the decline.
Despite the technical end to the recession, private credit growth is expected to continue to dip and is unlikely to reach pre-2006 levels, as the drivers of credit demand - asset prices, employment and income growth - have deteriorated sharply since then. Economists believe growth will turn positive within the first half of 2010, as a combination of lower interest rates and the easing of lending criteria take effect. But growth is expected to remain at low, single-digit rates for some time.
Annual increase in consumer credit card debt contracted by 2,2% y/y in September, compared with a rise of about 40% just two years ago. However, in September, credit card debt grew by R818bn - the largest monthly advance since September 2007.
In the meantime, growth in money supply eased to just 2,7% y/y in October from 4% in September.
Razina Munshi
-6,7 billion rand. SA's trade balance slipped into a deficit in October, compared with a R3,87bn surplus previously. Exports dropped 3,2% and imports rose by 21,9%. For the year to October, the trade deficit was R25,2bn (R61,2bn this time last year).
5,9 percent. Consumer inflation dropped back into its 3%-6% target range for the first time in 31 months in October, from 6,1% previously. Slower food and fuel price hikes drove down inflation. Uncertainty about electricity tariff increases clouds the outlook.
28 points. Business confidence rose by five points during the fourth quarter of 2009. Though it is still very low, the increase indicates that a growing number of respondents rated business conditions as satisfactory.
After soaring to a record high of US$1 195/oz last week, the price of gold pulled back sharply on Friday after Dubai World, the government investment company, announced that it was seeking to defer loan repayments in the amount of $59b n. Global markets suffered significant losses as risk aversion returned, eroding demand for high yielding assets including commodities. Despite the sharp fall in the price of gold last week, bullion prices still managed to increase 12% during November.
Last week, all crude oil benchmarks fell as rising risk aversion and concern over the outlook for the global economy dragged energy prices lower. Brent crude oil traded around US$76/bbl as news of a possible default by Dubai World rattled investors and spurred a rally in the dollar, eroding demand for commodities as an alternative asset. The United Arab Emirates' central bank, however, pledged its support for the country's local banks, easing concerns. We expect crude oil prices to remain supported at the $75/bbl level.
Commodities - Index slides |
Last week, the Reuters-Jefferies CRB index, which tracks 19 of the most actively traded commodity futures, declined sharply after a sell-off in global equity markets sent prices lower. The index declined 2% from the week before because of lower metals, agricultural and energy prices. However, it is still 19% higher than at the start of this year.
Ranking the Analysts 2009
