The credit indicator C2, July 2008

Household gross domestic debt totalled NOK 1 820 billion at end-July. The twelve-month growth fell for the fifth consecutive month to 9.4 per cent to end-July, down from 9.8 per cent to end-June. This was the lowest twelve-month growth since February 2000.

The lending growth still being higher than 9 per cent may be related to the tendency that households to a greater extent than before have the possibility to postpone repayments on their loans in financial enterprises. Thus, the lending growth will continue to be high, even though the growth for new loans decreases.

High, but declining growth in non-financial enterprise debt

Non-financial enterprise gross domestic debt amounted to NOK 1 128 billion at end-July. The twelve-month growth at end-July was 20.7 per cent, down from 21.0 per cent the previous month. Since December 2007, the non-financial enterprises have been the main contributor to the twelve-month growth in the credit indicator C2.

The strong growth in non-financial enterprise gross debt is related to the continued strong growth in the Norwegian economy. The high growth in enterprise domestic debt may also be related to a larger use of domestic financing as a consequence of the instability in international credit markets.

The growth in non-financial enterprise money supply has been substantially reduced during the last months; see the money supply M2 statistics.

Growth rates affected by portfolio shifts

69 per cent of the general public gross domestic debt of NOK 3 161 billion at end-July consists of bank loans. The twelve-month growth in bank loans decreased from 10.5 per cent to end-June to 10.0 per cent to end-July, while the twelve-month growth in credit from mortgage companies increased from 43.7 per cent to 44.8 per cent in the same period. The growth rates are affected by shifts between bank loans and credit from mortgage companies. This is due to the new legislation on covered bonds.