{"id":28186,"date":"2021-06-02T17:14:28","date_gmt":"2021-06-02T15:14:28","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=28186"},"modified":"2021-06-02T17:14:30","modified_gmt":"2021-06-02T15:14:30","slug":"psce-april-2021","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-april-2021\/","title":{"rendered":"PSCE \u2013 April 2021"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) fell by N$41.3\nmillion or 0.04% m\/m in April, bringing the cumulative credit outstanding to\nN$105.2 billion. On a year-on-year basis, private sector credit grew by 2.74%\nin April, compared to the 1.55% y\/y growth recorded in March. On a rolling\n12-month basis, N$2.81 billion worth of credit was extended to the private\nsector. N$2.30 billion worth of credit has been extended to individuals on a\n12-month cumulative basis, while N$880.0 million was issued to corporates. The\nnon-resident private sector decreased their borrowings by N$369.0 million.<\/p>\n\n\n\n

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

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

Credit extended to individuals increased by 3.91%\ny\/y in April, compared to the increase of 2.57% y\/y recorded in March. On a\nmonthly basis, household credit grew by 0.6%, following the increase of 0.4%\nm\/m recorded in March. Mortgage demand by individuals remained relatively\nstrong, increasing by 0.6% m\/m and 5.2% y\/y. Instalment credit increased by 0.7%\nm\/m, and by 0.5% y\/y, making April the first month since July 2019 to record an\nuptick on a year-on-year basis. Overdraft facilities extended to individuals\nhave increased by 1.8% m\/m and 4.2% y\/y. Other loans and advances (OLA) rose by\n0.8% y\/y and 0.2% m\/m, displaying a decline in demand amongst individuals over\nthe last 16 months, from the 65.6% y\/y increase in January 2020.<\/p>\n\n\n\n

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

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

Credit extension to corporates contracted for a third\nconsecutive month, on a month-on-month basis, declining by 0.8% m\/m, following the\n1.1% m\/m contraction recorded in March. On an annual basis, however, credit\nextension to corporates recorded low growth of 2.1% y\/y in April, compared to\nthe 1.2% y\/y growth registered in March. Mortgage loans to corporates expanded\nby 0.4% m\/m, other loans and advances (OLA) contracted 2.2% and overdrafts rose\n0.9% m\/m. On a year-on-year basis, mortgage loans contracted 2.0%, while OLA\nand overdrafts increased 1.3% and 13.5% respectively.<\/p>\n\n\n\n

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

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

The overall liquidity position of commercial\nbanks improved during April, increasing by N$376.0 million to reach an average\nof N$3.0 billion. According to the BoN, the improvement in the liquidity\nposition was largely due to higher inflows of funds by pension funds in\nadherence to domestic asset requirements as well as proceeds from minerals\nsales during the period under review. The outstanding balance of repo\u2019s stood\nat zero for thirteen out of the twenty business days in April and rose to N$591.3\nmillion in the last week of the month. <\/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 statistics release, broad money supply rose by N$3.8 billion or 3.1% y\/y in April, compared to the 9.4% y\/y increase recorded in March. Foreign reserve balances rose by N$6.5 billion to N$41.2 billion in April. The BoN ascribed the rise in official reserve stock to inflows in the form of the IMF Rapid Financing Instrument (RFI), SACU receipts, as well as foreign currency purchases by the BoN during the period under review.<\/p>\n\n\n\n

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

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

Overall, PSCE growth remains subdued, decreasing by N$41.4 million or 0.04% m\/m in April, resulting in a second consecutive month of negative growth. The rolling 12-month private sector credit issuance is down 15.5% from the N$3.32 billion cumulative issuances as at the end of April 2020, with individuals taking up most (81.8%) of the credit extended over the past 12 months.<\/p>\n\n\n\n

We expect the Bank of Namibia to leave interest rates unchanged at their historically low levels at its April MPC meeting, which will continue to accommodate indebted consumers and corporates. However, the lack of confidence in the economy is evidenced by corporates exploiting the low rates to de-lever their balance sheets rather than using the opportunity to expand their financial positions. As a result, the contracted interest rates alone are unlikely to drive PSCE growth. The lacklustre PSCE statistics reflect the nation\u2019s poor recent economic performance of late, as it reflects both lower consumption spending as well as lower investments by corporates, two vital components of GDP. With few drivers for economic growth, a recovery in credit extension is unlikely in the short term.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) fell by N$41.3 million or 0.04% m\/m in April, bringing the cumulative credit outstanding to N$105.2 billion. On a year-on-year basis, private sector credit grew by 2.74% in April, compared to the 1.55% y\/y growth recorded in March. On a rolling 12-month basis, N$2.81 billion \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-28186","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\/28186","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=28186"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/28186\/revisions"}],"predecessor-version":[{"id":28193,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/28186\/revisions\/28193"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=28186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=28186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=28186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}