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Private sector credit growth unchanged in February

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The value of loans outstanding to the private sector continued to grow at the same moderate pace in February as the month prior, data out of the Reserve Bank of Australia shows.

The central bank's financial aggregates for February show total credit increased by 0.4 per cent, after increasing at the same rate in January.

In the 12 months to the end of February total growth came in at 4.3 per cent, an increase on the 3.4 per cent rise in the previous year.

That pace is slow compared with the one per cent monthly average and 12.5 per cent annual average for the decade leading up to the global financial crisis in 2008.

Even so, there are signs of a pickup in credit growth the Reserve Bank of Australia (RBA) sees as crucial for the economy's move away from dependence on the soon-to-fade resource investment boom.

In the six months to February, the growth rate was 4.7 per cent on an annualised basis.

In the six months before that, it was 3.8 per cent, up from 2.8 per cent in the six months before that.

That growth should make the RBA confident in its current policy of sitting back and waiting for economic growth to respond to monetary stimulus.

At the same time, the relatively slow rate of acceleration suggests the next growth-restraining interest rate rise is still many months away.

READ: Why the credit aggregates will receive a lot more attention in upcoming months.

Personal credit fell by 0.2 per cent in February, after lifting by 0.1 per cent in January.

Business credit rose 0.4 per cent in the month after increasing 0.2 per cent in January.

Housing credit grew by 0.5 per cent in February after a lift of 0.6 per cent in January.

Annual growth in credit for investor housing rose to its highest level in three years and with new activity at record highs is set to push higher over 2014. Most of the credit growth for investors has been driven by investment in New South Wales and to a lesser extent Melbourne.

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Fall in personal credit offset by rises in business, housing credit: RBA.

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