The RBA must confront its credit growth challenge

Talk of tax hikes and spending cuts in the budget will weigh on consumer, business and investor sentiment, with wildly uneven credit growth certain to complicate the RBA's rebalancing of the economy.

Housing is too hot; business is too cold; and personal lending is definitely not right. As the budget approaches, the challenges just keep mounting for the Reserve Bank of Australia.

Housing credit rose by 0.5 per cent in March, to be 5.9 per cent higher over the year. Growth continues to be led by investor activity, with investor credit rising by 0.7 per cent in March.


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