Credit Growth Rate
The credit growth rate measures the rate at which total lending in an economy expands over a specific period.
Meaning in Practice
Credit growth reflects changes in bank lending to households and businesses. It is typically reported monthly or quarterly. The indicator signals the pace of financial expansion and leverage.
Why It Matters
Strong credit growth can support economic activity but may increase financial vulnerabilities. Weak credit expansion may indicate tighter financial conditions. Policymakers monitor it to assess financial stability risks.
Market Impact
Rising credit growth can boost equities linked to banking and real estate sectors. Excessive growth may raise concerns about asset bubbles. Bond and currency markets react to implications for monetary policy.
Example
If total bank lending increases by 6 percent year-over-year, the credit growth rate is 6 percent.