{"id":22866,"date":"2019-12-02T15:05:39","date_gmt":"2019-12-02T13:05:39","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=22866"},"modified":"2019-12-02T15:05:40","modified_gmt":"2019-12-02T13:05:40","slug":"psce-october-2019","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-october-2019\/","title":{"rendered":"PSCE \u2013 October 2019"},"content":{"rendered":"\n

Overall<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Private sector credit (PSCE) increased by N$510.1 million or 0.5% m\/m in\nOctober, bringing the cumulative credit outstanding to N$101.9 billion. PSCE grew\nat a slower pace of 6.14% y\/y in October compared to 6.24% y\/y in September. On\na rolling 12-month basis N$5.89 billion worth of credit was extended to the private\nsector, down 16.0% y\/y. Individuals took up N$3.79 billion while N$2.30 billion\nwas extended to corporates, and the non-resident private sector decreased their\nborrowings by N$193.7 million.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Individuals<\/strong><\/p>\n\n\n\n

Credit extended to individuals increased by 6.7% y\/y in October, a\nslight slowdown from the 6.8% y\/y growth recorded in September. Mortgage loans\nextended to individuals increased by 0.6% m\/m and 6.5% y\/y. Installment credit\ncontinued to contract, by 0.1% m\/m and 6.1% y\/y. Other loans and advances\n(which is made up of credit card debt, personal and term loans) grew by 2.0%\nm\/m and 24.2% y\/y in October. Household demand for overdraft facilities declined\nin October, contracting by 2.0% m\/m, although rising by 8.6% y\/y.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Corporates<\/strong><\/p>\n\n\n\n

Credit extension to corporates grew by 0.3% m\/m and 6.0% y\/y. On a\nrolling 12-month basis N$2.30 billion was extended to corporates as at the end\nof October, a decrease of 9.1% y\/y. Although the uptick in the general demand\nfor credit by corporates over the last year seems positive, the biggest driver\nof the increase in credit extended to corporates was shorter-term debt.\nOverdraft facilities extended to corporates decreased by 0.6% m\/m but rose 5.4%\ny\/y, while other loans and advances to corporates increased by 1.3% m\/m and 12.3%\ny\/y. The increase in these categories indicates that businesses continue to\nrely on other short-term debt to keep the lights on. Mortgage loans by\ncorporates contracted by 0.7% m\/m but rose 5.8% y\/y, while installment credit\nincreased by 0.5% m\/m, but contracted by 5.2% y\/y.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Banking Sector Liquidity <\/strong><\/p>\n\n\n\n

The overall liquidity position of commercial banks declined by N$227.3\nmillion in October to reach an average of N$2.77 billion. The Bank of Namibia\nattributed the decline in liquidity to lower domestic Government spending\nmainly due to lower economic activity coupled with higher foreign currency\noutflows as a result of import payments during October 2019. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Reserves and Money Supply<\/strong><\/p>\n\n\n\n

As per the BoN\u2019s latest money\nstatistics release, broad money supply rose by N$7.16 billion or 6.7% y\/y in October,\nfollowing an 8.3% y\/y increase in September. Foreign reserve balances rose by\nN$203.6 million to N$32.47 billion in October from N$32.27 billion in September.\nAccording to the BoN, the increase was mostly due to an inflow of SACU receipts\nas well as lower government payments during the period under review.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Outlook<\/strong><\/p>\n\n\n\n

Private sector credit extension continues to languish, increasing by 6.14% y\/y during October compared to the 6.24% y\/y growth rate recorded in September. It has been 36 months since PSCE last recorded double digit growth on an annual basis. As expected, the 25-basis point rate cut in August has not resulted in higher demand for credit as consumers are already over-indebted. With low economic activity and lack of demand, growth opportunities for businesses remain limited.<\/p>\n\n\n\n

As mentioned earlier, corporates\ncontinue to rely on short-term debt to keep the lights on instead of taking on\nlonger-term credit to invest in capital projects to expand operations. We do\nnot expect conditions to improve in the short- to medium-term.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$510.1 million or 0.5% m\/m in October, bringing the cumulative credit outstanding to N$101.9 billion. PSCE grew at a slower pace of 6.14% y\/y in October compared to 6.24% y\/y in September. On a rolling 12-month basis N$5.89 billion worth of credit was \u2026 Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,22],"tags":[],"class_list":["post-22866","post","type-post","status-publish","format-standard","hentry","category-economicresearch","category-psce"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/22866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/comments?post=22866"}],"version-history":[{"count":2,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/22866\/revisions"}],"predecessor-version":[{"id":22874,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/22866\/revisions\/22874"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=22866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=22866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=22866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}