{"id":30126,"date":"2021-12-01T14:56:30","date_gmt":"2021-12-01T12:56:30","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=30126"},"modified":"2021-12-01T14:56:33","modified_gmt":"2021-12-01T12:56:33","slug":"psce-october-2021","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-october-2021\/","title":{"rendered":"PSCE \u2013 October 2021"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) increased\nby N$700.0 million or 0.66% m\/m in October, bringing the cumulative credit\noutstanding to N$106.4 billion. On a year-on-year basis, private sector credit\nincreased by 2.69% in October, down slightly from growth of 2.74 % y\/y in\nSeptember. On a 12-month cumulative basis N$2.79 billion worth of credit was\nextended to the private sector. Individuals continue to take up the majority of\nthis cumulative issuance. After two months of consecutive month-on-month\ndeclines in total claims on the private sector, in July and August, total\nclaims have now risen month-on-month in both September and October. Over the\nlong–<\/ins>term\nthe outlook is less encouraging. From the start of 2015 until December 2019,\nPSCE grew by an average of 9.41% y\/y. Since the start of 2020 average\nyear-on-year growth has fallen to 2.75% y\/y, despite several interest rate cuts\nlast year. A positive reversion in this trend seems unlikely in the short-term.<\/p>\n\n\n\n

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

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

Credit\nextended to individuals decreased by 0.11% m\/m but increased by 2.78% y\/y in\nOctober. On a month-on-month basis, \u2018other loans and advances\u2019 (consisting of credit\ncard debt, personal- and term loans) increased by 1.7% m\/m. The other two\nsubcategories of loans & advances, namely mortgage loans and overdraft,\nshrunk by 0.2% m\/m and 2.2% m\/m in October. Instalment credit shrunk by 0.8%\nm\/m. On a year-on-year basis all subcategories of loans & advances\nregistered increases in October. Mortgage loans increased by 3.2% y\/y, other\nloans and advances grew by 2.6% y\/y and overdrafts grew by 1.2% y\/y. Overall growth\nof credit extended to individuals remains sluggish. In the four years prior to\n2020, total credit extensions to individuals grew at an average of 8.1% y\/y.\nSince 2020 that figure has fallen to 4.6% y\/y.<\/p>\n\n\n\n

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

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

Credit\nextended to corporates grew by 1.78% m\/m and 3.00% y\/y in October. Total\ncorporate loans & advances grew by 1.7% m\/m. Specifically, mortgage loans\ngrew by 2.3% m\/m, other loans and advances grew by 1.3% m\/m and overdrafts grew\nby 1.6% m\/m. Instalment credit grew by 2.4% m\/m. The trend is broadly similar\non year-on-year basis. Total corporate loans & advances grew by 2.8% y\/y in\nOctober, with all sub-categories recording increases. This is also the first\ntime in 2021 that there have been two successive month-on-month increases in\ncredit extensions to corporates, although the growth is subdued. <\/p>\n\n\n\n

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

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

The overall liquidity\nposition of Namibia\u2019s commercial banks increased in October, rising by N$832.9\nmillion to an average of N$2.23 billion. The BoN attributes the increase to\ncash inflows from diamond sales, coupon payments and increased government\nexpenditure. Accordingly, the total balance of repos outstanding decreased in\nOctober. The repo balance fell to N$200.9 million at the end of the month after\nending September at N$907.7 million.<\/p>\n\n\n\n

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

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

Broad Money Supply (M2)\nincreased by N$5.70 billion or 1.0% y\/y in October, according to BoN\u2019s latest\nmonetary statistics. The money supply increased by 4.6% m\/m, increasing to\nN$128.8 billion after ending September at N$123.1 billion. The broad money\nsupply for September was revised upwards marginally by approximately N$215.5\nmillion. The BoN\u2019s stock of international reserves rose by 4.4% m\/m to N$47.9\nbillion in October. <\/p>\n\n\n\n

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

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

PSCE\ngrowth in October remained subdued, in line with the sluggish trend in growth\nthat has now persisted for the best part of two years. The South African\nReserve Bank\u2019s (SARB) monetary policy committee (MPC) raised the South African\nRepo Rate for the first time in almost three years during its last meeting on\n18 November. The rate hike came off the back of elevated inflation that\nthreatened to rise beyond 6.0% y\/y, the upper-bound of the SARB\u2019s inflation\ntarget. While the rate hike may ease inflation concerns it will not stimulate growth\nin the private sector credit markets. Despite this hike, Namibia\u2019s repo rate is\nnow equal to the that of South Africa\u2019s, so there is no immediate need for the\nBoN\u2019s MPC to hike, however we expect them to follow suit at the 15 December\nmeeting. Regardless, there are plenty of external forces conspiring to supress\ngrowth in private sector credit extensions and not all that many working to stimulate\nit. Weak growth is likely to continue in the short to medium-term.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$700.0 million or 0.66% m\/m in October, bringing the cumulative credit outstanding to N$106.4 billion. On a year-on-year basis, private sector credit increased by 2.69% in October, down slightly from growth of 2.74 % y\/y in September. On a 12-month cumulative basis N$2.79 \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-30126","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\/30126","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=30126"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/30126\/revisions"}],"predecessor-version":[{"id":30133,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/30126\/revisions\/30133"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=30126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=30126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=30126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}