Consumption up but ‘slowdown’ in lending: RBF

The Reserve Bank of Fiji says consumption activity picked up in the first month of this year however overall commercial bank lending in the year to February was at a slowdown compared with the same period last year.

The RBF said in its March economic review that the increase in consumption activity was evident from partial indicators.

It said that in January, net Value Added Tax collections registered an annual increase of 17.2 percent while commercial banks’ lending for consumption purposes rose by 3.1 percent in the year to February.

“Spending is also being supported by rising incomes, as indicated by the growth of 5.9 percent in Pay As You Earn (PAYE) collections,” the RBF said.

“Lending for investment purposes grew by 3.0 percent on an annual basis in February, suggesting some investment activity. However, the growth has slowed notably from the 12.5 percent increase recorded in the corresponding period last year.”

The RBF noted that in the year to February, total commercial bank lending rose marginally by 0.1 percent compared with an 11.6 percent increase recorded in the same period last year.

“The slowdown is attributed to a contraction in lending to public enterprises as well as the manufacturing, professional and business services, agricultural and real estate sectors and to private individuals. Private sector credit rose marginally in the year to February by 0.5 percent.”