South Africa in credit slump

South Africa’s credit lending has fallen for the first time in 43 years. This is attributed to companies halting expansion plans and consumers cutting back on major spending. According to the South African reserve bank, borrowing has fallen by 0.4% since September.

According to Vunani Securities’ chief economist, Johan Rossouw, "Credit demand will remain in negative territory until about April next year. The big driver remains consumer spending. Monetary policy should have been more expansionary."

South Africa’s largest retail bank, Absa Bank says it has cut credit to consumers with car and mortgages loans increasing. Corporate spenders Anglo Platinum and paper giant Sappi are also said to have made significant cutbacks on project spending with global demand falling, according to Bloomberg.