{"id":29492,"date":"2021-10-01T10:23:26","date_gmt":"2021-10-01T08:23:26","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=29492"},"modified":"2021-10-01T10:23:29","modified_gmt":"2021-10-01T08:23:29","slug":"psce-august-2021","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-august-2021\/","title":{"rendered":"PSCE \u2013 August 2021"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) decreased by N$94.3 million or 0.09%\nm\/m in August. On a year-on-year basis, PSCE grew by 1.85% y\/y in August, down\nfrom July\u2019s increase of 2.72% y\/y. On a month-on-month basis, financial\ncorporations, individuals and the non-resident private sector all increased\ntheir borrowings. Corporates, on the other hand, decreased their borrowings by\nN$519.1 million or 1.20% m\/m. Cumulative credit extended to the private sector\nover the last 12-months amounted to N$1.91 billion, down 17.0% from the N$2.23\nbillion issued by this time last year. Individuals have taken up the majority\nof this cumulative issuance. <\/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 0.66% m\/m and 4.40% y\/y in August. This is the largest year-on-year increase in 2021. This increase was driven strong growth mortgage loan growth of 4.6% y\/y and 4.4% y\/y growth in other loans & advances (credit card debt, personal- and term loans). Overdrafts grew by 9.1% y\/y in August. All subcategories of loans and advances posted growth on a monthly basis with other loans and advances posting growth of 2.1% m\/m, mortgage loans increasing by 0.4% m\/m and overdrafts climbing by 0.2% m\/m. <\/p>\n\n\n\n

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

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

Credit\nextended to corporates contracted by 1.20% m\/m and 1.23% y\/y in August, as\nbusinesses continued to delever their balance sheets. This is the first\nyear-on-year decrease in corporate credit extensions in 2021. The decline is\nlargely due to overdrafts to corporates decreasing by 5.1% m\/m and 3.1% y\/y. Other\nloans & advances shrunk by 1.7% m\/m and 1.0% y\/y. Instalment credit grew\nmarginally by 1.5% m\/m but contracted by 2.6% y\/y, the 19th<\/sup>\nconsecutive month of contraction on an annual basis. Corporate mortgages\nincreased by 2.1% m\/m and 0.4% y\/y. <\/p>\n\n\n\n

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

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

The overall\nliquidity position of Namibia\u2019s commercial banks increased significantly in\nAugust, rising by roughly N$1.24 billion to an average of N$1.80 billion in\nAugust. As a result of the improved liquidity, the balance of repo\u2019s\noutstanding decreased. The repo balance at the start of August was N$1.02\nbillion, by the end of the month it stood at N$734.6 million. <\/p>\n\n\n\n

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

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

Broad Money Supply contracted by N$1.38 billion or\n1.1% y\/y in August,<\/ins> according to the BoN\u2019s latest\nmonetary statistics. The money supply did however increase month-on-month and\nnow stands at N$123.1 billion compared to N$121.5 billion at the end of July.\nThe BoN\u2019s stock of international reserves decreased by 4.1% m\/m to N$40.9 at\nthe end of August. The central bank attributes this decrease to both increased\ngovernment payments and commercial bank purchases of foreign currency for\nimport payments in August. <\/p>\n\n\n\n

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

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

Overall, PSCE growth remained subdued and in line with what has been seen so far in 2021. As stated, rolling 12-month issuance is down 17.0% y\/y to N$1.91 billion, but more tellingly that same figure is down 67.1% compared to August 2019. <\/a>\u00a0<\/p>\n\n\n\n

Even if, interest rates remain steady for the remainder of 2021, as expected, this is unlikely to meaningfully increase the growth rate of PSCE. Despite growth in the economy in Q2 2021, consumers are likely to remain cautious and prioritise saving over consumption. The data bears this out as year-on-year increases in credit extensions to individuals in 2021 are similar to those seen in 2020. Meaningful PSCE growth is therefore likely to return only once macroeconomic conditions improve meaningfully and both consumers and businesses can spend more freely. <\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) decreased by N$94.3 million or 0.09% m\/m in August. On a year-on-year basis, PSCE grew by 1.85% y\/y in August, down from July\u2019s increase of 2.72% y\/y. On a month-on-month basis, financial corporations, individuals and the non-resident private sector all increased their borrowings. Corporates, on \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-29492","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\/29492","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=29492"}],"version-history":[{"count":2,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/29492\/revisions"}],"predecessor-version":[{"id":29500,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/29492\/revisions\/29500"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=29492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=29492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=29492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}