{"id":23422,"date":"2020-02-04T15:17:40","date_gmt":"2020-02-04T13:17:40","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=23422"},"modified":"2020-02-04T15:17:42","modified_gmt":"2020-02-04T13:17:42","slug":"psce-december-2019","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-december-2019\/","title":{"rendered":"PSCE \u2013 December 2019"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) increased by N$1.24 billion or\n1.2% m\/m in December, bringing the cumulative credit outstanding at the end of\n2019 to N$103.7 billion. On a year-on-year basis, private sector credit\nincreased by 6.9% in December, increasing at a quicker rate than the 5.9%\nrecorded in November. From a rolling 12-month basis, N$6.7 billion worth of\ncredit was extended to the private sector, compared to the previous year, the\nrolling 12-month issuance is down 1.4% from the N$6.8 billion issuance observed\nby the end of December 2018. Of this cumulative issuance, individuals took up\nthe lion\u2019s share of credit, amassing N$4.1 billion worth of debt while N$2.8\nbillion was extended to businesses. The non-resident private sector decreased\ntheir borrowings by N$170 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 7.2% y\/y in December, compared to 6.6% y\/y\nrecorded in November. On a monthly basis, household credit increased by 1.2%,\ndouble the pace of the 0.6% growth registered in November. Most of this growth\nstemmed from an increase in \u2018Other loans and advances\u2019 of 5.8% m\/m and 32.0%\ny\/y in December. This relatively quick pace can likely be explained by consumers\nmaking use of credit cards and payday loans to purchase gifts and pay for\ntravel expenses over the holiday period. Installment credit continued to\ncontract, by 0.1% m\/m and 6.0% y\/y. Mortgage loans extended to individuals grew\nby 0.7% m\/m and 5.9% y\/y, compared to 0.2% m\/m and 5.7% y\/y in November. <\/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 1.1% m\/m and 7.1% y\/y in December, following a\nslow increase of 0.4% m\/m and 5.7% in November. On a rolling 12-month basis N$2.76\nbillion was extended to corporates in 2019, an increase of 17.3% y\/y from the\nN$2.35 billion that was extended to corporates in 2018.  Installment\ncredit extended to corporates, which has been contracting on an annual basis since\nFebruary 2017 remained depressed, contracting by 0.9% m\/m and 4.1% y\/y in\nDecember. Leasing transactions to corporations grew by 1.1 m\/m, but\ndeclined by 31.7% y\/y. Overdraft facilities extended to corporates increased by\n3.0% m\/m and 1.9% y\/y.<\/p>\n\n\n\n

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

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

The overall\nliquidity position of commercial banks deteriorated significantly during\nDecember, declining by N$858.3 million to reach an average of N$982.7 million. Bank\nof Namibia attributed the decline in liquidity to corporate tax payments during\nDecember as well as a high uptake of treasury bills and other liquid assets by\ncommercial banks. The relatively low liquidity position has prompted commercial\nbanks to utilize the BoN\u2019s repo facility, with the balance of repo\u2019s\noutstanding increasing from N$284.7 million at the start of December to N$1.75\nbillion at the end of the month.<\/p>\n\n\n\n

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

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

As per the BoN\u2019s latest money statistics release, broad\nmoney supply rose by N$11.0 billion or 10.5% y\/y in December, following a 10.6%\ny\/y increase in November. Foreign reserve balances fell by 3.0% m\/m to N$28.8\nbillion in December. The BoN again stated that the decline was due to the net\npurchases of South African Rands by commercial banks for import payments\ncoupled with increasing government foreign payments during the month under\nreview.<\/p>\n\n\n\n

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

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

Private sector credit growth\nfigures for 2019 remained largely in the same 6-7% y\/y range as in 2018. The\nrolling 12-month issuance of N$6.7 billion is however down 1.4% from the N$6.8\nbillion issuance recorded at the end of 2018.<\/p>\n\n\n\n

The SARB\u2019s MPC surprised markets\nwith a unanimous decision to cut the repo rate by 25-basis points to 6.25% at\nits meeting in January. We expect the BoN\u2019s MPC to follow the SARB\u2019s decision\nat its next meeting later in February, as Namibian inflation figures are\ntrending at very low levels and economic growth is stagnating. Policy changes\n(and policy certainty) to attract foreign investment will at this moment likely\nbe more effective to revive economic activity than more accommodative monetary\npolicy, although a 25-basis point rate cut should provide some relief to\nheavily indebted consumers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$1.24 billion or 1.2% m\/m in December, bringing the cumulative credit outstanding at the end of 2019 to N$103.7 billion. On a year-on-year basis, private sector credit increased by 6.9% in December, increasing at a quicker rate than the 5.9% recorded in November. \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-23422","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\/23422","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=23422"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/23422\/revisions"}],"predecessor-version":[{"id":23429,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/23422\/revisions\/23429"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=23422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=23422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=23422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}