{"id":23158,"date":"2020-01-07T14:31:26","date_gmt":"2020-01-07T12:31:26","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=23158"},"modified":"2020-01-07T14:33:32","modified_gmt":"2020-01-07T12:33:32","slug":"psce-november-2019","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-november-2019\/","title":{"rendered":"PSCE \u2013 November 2019"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) increased by N$586.8 million\nor 0.58% m\/m in November, bringing the cumulative credit outstanding to N$102.5\nbillion. On a year-on-year basis, private sector credit increased by 5.92% in\nNovember, somewhat slower than the 6.14% growth rate recorded in October. On a\nrolling 12-month basis, N$5.7 billion worth of credit was extended to the\nprivate sector, with individuals taking up N$3.7 billion while N$2.2 billion\nwas extended to corporates, and the non-resident private sector has decreased\ntheir borrowings by N$205.0 million.<\/p>\n\n\n\n

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

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

Credit\nextended to individuals increased by 6.6% y\/y in November, almost unchanged\nfrom the 6.7% y\/y growth recorded in October. On a monthly basis household\ncredit increased by 0.6%, once again a similar pace to the 0.5% growth\nregistered in October. Mortgage loans extended to individuals grew by 0.2% m\/m\nand 5.7% y\/y, compared to 0.6% m\/m and 6.5% y\/y in October. Household appetite\nfor instalment credit remains subdued as reflected in the contractions of 0.4%\nm\/m and 5.8% y\/y in November. Other loans and advances grew at a relatively\nquick pace of 4.3% m\/m and 27.3% y\/y during the month, indicating that\nconsumers remain stretched as they are taking on more credit card debt, personal, and term loans.<\/p>\n\n\n\n

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

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

Credit\nextension to corporates grew by 0.4% m\/m and 5.7% y\/y in November, compared to\nthe growth of 0.3% m\/m and 6.0% y\/y recorded in October. On a rolling 12-month\nbasis N$2.2 billion was extended to corporates, a far cry from the highs of\nover N$5.3 billion recorded for the 12 months ending in February 2015.\nInstallment credit extended to corporates printed flat m\/m, but contracted by 4.1%\ny\/y in November. Leasing transactions to corporations declined by 2.4% m\/m and\n34.2% y\/y. Overdraft facilities extended to corporates contracted by 2.6% m\/m\nand 5.8% y\/y, making it the first contraction on an annual basis since June\n2018. Whether corporates will continue to pay back overdraft facilities going\nforward remains to be seen, although it seems unlikely as economic conditions\nremain challenging. Mortgage loans extended to corporates grew by 0.5% m\/m and\n5.9% y\/y, while other loans and advances grew by 2.9% m\/m and 15.8% 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 deteriorated during November, declining by N$925.3 million to reach an average of N$1.84 billion. Bank of Namibia attributed the decline in liquidity to higher issuance of BoN bills and the issuance of a new Treasury Bill, coupled with cross border payments made during November. <\/p>\n\n\n\n

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

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

Broad money supply rose by 9.3% y\/y in November,\nfollowing a 6.7% y\/y increase in October, as per the BoN\u2019s latest money\nstatistics release. Foreign reserve balances fell by 8.4% m\/m to N$29.8 billion\nin November. The BoN stated that the decline was due to the net purchases of\nSouth African Rands by commercial banks for import payments coupled with\nincreasing government foreign payments during the month under review.<\/p>\n\n\n\n

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

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

Overall PSCE growth in\nNovember moderated for a third consecutive month on a year-on-year basis,\nincreasing by 5.9%. Rolling 12-month private sector credit issuance is\ndown 21.0% from the N$7.2 billion issuance observed at the end of November\n2018, with individuals taking up most (65.2%) of the credit extended over the\npast 12 months.<\/p>\n\n\n\n

Low economic activity and a\nlack of demand means that growth opportunities for businesses remain limited.\nConsumer confidence will first need to improve before corporate demand for credit\nwill increase. Increased consumer demand results in more business production\nthat must satisfy this demand, thus incentivising businesses to borrow in order\nto fund capital and expansionary projects. Until such a time that consumer\nconfidence increase, we do not expect to see any significant growth in PSCE. It\nis unlikely that monetary policy will drive PSCE growth in the coming year, as\ninterest rates are not far off historically low levels.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$586.8 million or 0.58% m\/m in November, bringing the cumulative credit outstanding to N$102.5 billion. On a year-on-year basis, private sector credit increased by 5.92% in November, somewhat slower than the 6.14% growth rate recorded in October. On a rolling 12-month basis, N$5.7 \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-23158","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\/23158","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=23158"}],"version-history":[{"count":2,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/23158\/revisions"}],"predecessor-version":[{"id":23166,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/23158\/revisions\/23166"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=23158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=23158"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=23158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}