Driven first and foremost by a continuing boom in residential property, Australia’s credit growth is expected to have continued. Of particular interest will be the housing investor component, which has defied regulatory efforts of containment and expanded by a very strong 11.4% at a monthly annualised rate in March (10.4% yoy after 10.1%). At the same time, credit demand from businesses is expected to have strengthened compared with a fairly lacklustre 0.2% mom in March, which was well short of recent growth rates, according to Standard Chartered. That said, this is the most volatile component of this series, and so the soft March result has in itself little meaning. Even if the overall monthly growth rate merely matches the 0.5% of the previous two months, the annual rate would again tick higher to 6.3% from 6.2%, added Standard Chartered. And this was even before the RBA cut rates again in May. Monetary policy easing in Australia is certainly working on the credit channel.
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