Picture: 123RF/Khwanchai Phanthong
Picture: 123RF/Khwanchai Phanthong

Growth in credit granted to the private sector slowed in July, undershooting market expectations.

Private sector credit extension (PSCE) grew at an annual rate of 5.41% in July, a slowdown from June’s 5.68%, Reserve Bank data showed on Thursday

A poll of economists by Trading Economics had expected PSCE growth of 5.2% while market consensus put the figure at 5.9%.

"The subdued economic growth backdrop, coupled with depressed business confidence readings and lacklustre investment rates have contributed to dampened corporate demand for credit," Investec economist Lara Hodes wrote in a note on Monday before the release of the data.

"While household credit growth has been on an upward trajectory, it still remains weak in historical terms."

M3 money supply, the Bank’s broadest measure of how much money is circulating in the economy, grew 6% year on year in July, from 5.77% in June.

When money supply increases, it typically increases the availability of loans. The higher the money supply growth, the higher the growth in available funds.