Tuesday, August 1, 2017

M3 Slows, Whilst Loan Growth Picks Up in June

Economic Research
1 August 2017

Economic Update

The growth in broad money supply, or M3, slowed to 4.3% YoY in June on account of a decline in demand for funds for external operations. Meanwhile, demand for funds from government operations also eased during the month. We envisage M3 growth to pick up to 4.5% in 2017 from 2016’s 3% (2015: 2.6%) on the back of stronger economic growth. Loans are expected to grow by a quicker pace of 5.7% in 2017 (2016: 5.3%) and compared with 2015’s 7.9%. This is mainly on stronger business loans due to a pick-up in economic activity. However, this was partly offset by slower household loans, as the banks maintained stringent lending rules.

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

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