Banks shutting their doors to lenders

Friday 29 May 2009

Article by Mozo

Bank lending growth rates have fallen to levels last seen in 1994, the latest figures from the Reserve Bank of Australia (RBA) show.

While the value of home loans, credit cards and other forms of private lending handed out to consumers grew month-on-month in April, overall borrowing increased just 0.1 per cent, matching the slowdown seen last month.

Meanwhile, total private sector credit was 4.6 per cent compared to March, which in turn was 4.9 per cent higher than the previous month, indicating that the Australian economy is continuing to slow down.

Most analysts are firm in their belief that data released next week will show that Australia has slipped into recession, following the likes of the US and the UK.

The Sydney Morning Herald reports that the RBA figures do offer signs that the government’s efforts to help the housing market back on to its feet may be working, with total home loan approvals rising 0.7 per cent in April.

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