Private sector credit growth slowed to +3.8% y/y in December from +4.2% y/y in November. The latest reading was lower than consensus estimates of +4.1% y/y.

Credit demand for both corporate (+4.6% year-over-year in December, down from +5.0% in November) and household (+3.0% year-over-year in December, down from +3.1% in November) slowed.

Private sector credit demand has slowed, leading to a decrease in M3 money supply growth for the second consecutive month. It dropped to +6.7% year-over-year in December from +7.8% year-over-year in November.

December’s credit demand slowdown reinforces the reality that in the face of tight lending standards and broader economic concerns, interest rate cuts are having little effect on the private sector’s appetite for taking on more debt.