Private sector borrowing has contracted for the first time since the early 1990s fuelled by nervous businesses who are unwilling or unable to take on debt.
Figures released by the Reserve Bank on Friday showed private sector credit contracted by 0.3 per cent in December. A 1.1 per cent plunge in business borrowing was behind the slump – fuelling concerns that businesses will be unable to maintain jobs in the months ahead.
Private sector credit growth now sits at an annual rate of 6.7 per cent, its weakest pace in over a decade and more than half the peak of 16.4 per cent reached in 2007.
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