Monday, August 1, 2016

Slowdown in Loan Growth Continues, Whilst Money Supply Eased in June

Economic Research
1 August 2016

Economic Highlights

Growth of the broader money supply, M3, eased to 1.9% y-o-y in June, from +2.2% in May and compared to +1.4% in April, due to a slowdown in demand for funds by the private sector and external operations. Moving forward, we expect M3 to recover at a gradual pace of 4.0%-5.0% in 2016, above the +2.7% registered last year, as capital outflows moderate.
In contrast, loan growth eased further to 5.6% y-o-y in June, the weakest in nine years, from +6.2% in May and compared with +6.3% in April. This was attributed to a deceleration in growth of corporate loans, made worse by the ongoing consolidation of household loans during the month.

Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
Economist: Aris Nazman Maslan | +603 9280 2184

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