Household secured credit balances (R1 168,6 billion and 76,9 % of total credit balances) showed growth of 3,4 % y/y up to the end of August. This low year-on-year growth in secured credit balances was the result of trends in household mortgage balances (see below), with instalment sales balances (21,7% of total household secured balances and mainly related to vehicle finance) rising by 4,6% y/y up to end-August.
Household unsecured credit balances (R351,5 billion and 23,1% of total credit balances) increased 3,5 % y/y in the period January to August this year. General loans and advances balances (58,8% of total unsecured credit balances and largely consisting of personal loans and micro finance) increased by 4,0 % y/y up to the end of August.
The value of outstanding private sector mortgage balances (R1 328 billion and 39,5% of total private sector credit balances of R3 366,2 billion), which includes both corporate and household mortgage balances, increased by 4,7% y/y in the first eight months of the year.
Corporate mortgage balances (R414,9 billion and 31,2% of total private sector mortgage balances) showed growth of 8,5% y/y in January to August. Growth in outstanding household mortgage balances (R913,1 billion, with a share of 78,1% in total household secured credit balances and 68,8% in total private sector mortgage balances) remained largely stable 3,1 y/y up to end-August. The value of outstanding mortgage balances is the net result of all property transactions related to mortgage loans, including additional capital amounts paid into mortgage accounts and extra monthly payments above normal mortgage repayments.
South Africa’s economic growth rebounded to 2,5% quarter-on-quarter (q/q) in the second quarter of 2017 after contracting by 0,6% q/q in the first quarter. The second-quarter growth was largely driven by an improvement of 33,6% q/q in agricultural production, with growth excluding agriculture recorded at 1,6% q/q in the second quarter.
The economy is, however, forecast to grow by a still low 0,5% in 2017 and 1,2% in 2018, with the South African Reserve Bank’s (SARB) estimation of potential growth at 1,1% for this year and 1,2% for next year.
Despite poor growth prospects, the SARB kept the repo rate unchanged at the September.
Monetary Policy Committee Meeting, mainly as a result of potential risks to the inflation outlook, such as the rand exchange rate, oil and fuel prices, electricity tariffs and factors such as global