Seasonal factors may have been behind a slowdown in credit growth in July and a drop in private deposits. As a result, M2 money supply shrank by over 3% and M1 by more than 7%.
Outstanding credit to residents rose by a mere KD 22 million in July on the heels of last month’s large jump. Year-on-year (y/y) growth remaining relatively unchanged at 4.6% despite the slowdown.
Personal facilities (excluding loans for the purchase of securities) experienced its largest gain since December 2007, increasing by KD 111 million and pushing growth to 13.8% y/y. This sector, mainly consumer and installment loans, remains the primary driver behind credit growth.
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