Signs of economic recovery from recession in Australia have yet to translate into people being bold enough to take out additional credit.
The Reserve Bank’s monthly figures showed total credit was flat for a third straight month in October, to be just 1.8 per cent higher on the year.
That is the lowest annual rate since February 2010 and the aftermath of the global financial crisis.
Mortgages for owner-occupiers and investors rose by just 0.3 per cent in October, to leave the annual rate at 3.3 per cent.
Personal loans fell 0.7 per cent to minus 12.7 per cent and business loans declined 0.3 per cent to 1.4 per cent.
Little wonder that Treasurer Josh Frydenberg is cagey about saying whether Australia is out of recession ahead of key economic growth figures this week.
At this stage, economists’ forecasts centre on a 2.4 per cent growth outcome for the September quarter when the national accounts are released on Wednesday.
This would follow two quarters of economic contraction, notably a seven per cent collapse in the June quarter as a result of the COVID-19 pandemic..
If economists are correct, it would technically mark the end of the first recession in nearly 30 years.
But Mr Frydenberg isn’t prepared to jump the gun.
“Let’s wait and see what the national account numbers show on Wednesday,” he told ABC radio on Monday.
“We have seen some partial data already, capex numbers and construction, and it does show these areas continue to be challenging.”
Both the quarterly capital expenditure and construction report released last week proved weaker than market expectations.
New business figures on Monday also showed company gross operating profits grew by a more modest 3.2 per cent in the September quarter, while inventories – stock on shelves and in warehouses – fell by a further 0.5 per cent.
Mr Frydenberg insists economic support being provided by the government is making a difference and the economy is recovering.
Pressed again on whether he is confident of a positive result on Wednesday, the treasurer said: “I’m not Nostradamus, I’m not going to make a prediction for Wednesday. The numbers will be what they are.”
“This is primarily a health crisis and as long as we suppress the virus successfully … I’m confident our economy will continue to recover strongly.”
Shadow treasurer Jim Chalmers said a positive growth result would be welcome but not surprising after the easing of restrictions around the country.
“What looks like a recovery on paper will still feel like a recession for many Australians,” he told reporters in Canberra.
“The Morrison government and Josh Frydenberg shouldn’t be congratulating themselves while unemployment queues are still lengthening.”
Economists will finalise their growth predictions on Tuesday when international trade and government spending data for the quarter is released.