Yet more evidence emerged today that the Australian economy is slowing, with new data from the ABS showing businesses slashed credit levels in February.
Commercial finance commitments fell by 10.4% seasonally adjusted in February compared to January, with fixed lending falling 13.8% and revolving credit commitments such as overdrafts down 2.8%.
Consumers are not sending quite the same message of caution, with total personal finance lifting 0.9% seasonally adjusted in February.
However, it is clear rising interest rates are having an impact. Bank loans fell 0.8%, but revolving credit commitments – in short, borrowing on credit cards – increased 2.4%, suggesting some consumers may be offsetting higher mortgage payments by increased use of the plastic.
The notion that the economy is slowing has not been lost on the Reserve Bank of Australia, the minutes of the RBA’s most recent board meeting released today reveal.
Feedback from retailers that sales have been flat for the first three months of the year was a key factor in the RBA’s decision not to lift rates at its meeting earlier this month, the minutes reveal.
Otherwise, there are few surprise in the minutes however, with the RBA commenting that while inflation is expected to slow in the medium term, both upside and downside risks are present.
On the markets today, the S&P/ASX200 is up 0.9% to 5388.2 at 1pm, thanks primarily to higher prices for energy and resources stocks.