Australia Jan. private credit rises 7.7%

Australia Jan. private credit rises 7.7%

Australia’s Private Credit Growth Hits Five-Year High in December 2025

Australia’s private sector credit expanded by 7.7% annually in December 2025, marking the fastest pace in five years and reflecting sustained demand for lending despite persistently high interest rates. This follows a monthly increase of 0.8%, outpacing market forecasts of 0.6% and building on a 0.6% rise in November. The growth was driven by stronger borrowing across housing, business, and personal credit segments.

Housing credit grew 0.7% month-on-month, accelerating from 0.6% in the prior month, while business credit saw a sharper rise of 1.0%, up from 0.9%. Personal credit also rebounded sharply, rising 0.5% after a contraction of 0.6% in November. These trends highlight resilience in both consumer and corporate borrowing amid a restrictive monetary policy environment.

The annual growth rate of 7.7% represents a notable acceleration from 7.4% recorded in the preceding two months, underscoring continued confidence in private-sector credit demand. This performance contrasts with broader economic challenges, including inflationary pressures and elevated borrowing costs, which have constrained growth in other areas.

Analysts attribute the surge to a combination of factors, including strong housing market fundamentals, ongoing business investment, and improved consumer sentiment. However, risks remain tied to potential interest rate adjustments and global economic uncertainties.

The data reinforces the importance of private credit as a key driver of economic activity in Australia, even as policymakers navigate the delicate balance between curbing inflation and supporting growth.

Trading Economics, "Australia Private Credit Growth at 5-1/2-Year High," December 2025.