/ 29 August 1997

Credit growth falls sharply

FRIDAY, 11.00AM:

LATEST economic data released on Thursday evening by the Reserve Bank are likely to be taken as good news by Bank governor Chris Stals.

Despite an apparent rise in inflation in July, growth in the extension private domestic credit dropped sharply to 14,78% year-on-year, from 16,39% in June. M3 money supply growth rose only slightly to 13,36% from 12,67%, a smaller than expected rise, which is likely to reassure Stals that his tight monetary policy is yielding results.

Despite the official July CPI figure of 9,1% against consensus expectations of 8,5%, the core inflation rate maintained a downward trend, with economists saying that underlying inflationary pressures continue to decline.