Total credit in the Israeli economy rose to NIS 1.4 billion at the end of the first half of 2006, but marked a slowdown in the growth rate from previous years, the Bank of Israel said Sunday.
Including credit to the government, the business sector and households, the bank said the level of credit in the economy expanded in the first half of 2006 by an annual rate of 1 percent, which was slower than the 4% annual average rate of growth in credit in the past three years.
The slowdown stemmed from a drop in credit to the government for the first time, by some 9%. Despite this, however, the central bank noted, that the government's share of credit was still high at 39% of the total.
Credit to the business sector grew 11%, a similar rate to 2005, taking up 44% of the total credit.
The BOI noted that the rise in credit to the business sector, as was the case in the preceding four years, came from non-bank sources.
The banks' share of credit to the business sector, dropped to 57% in June 2006, compared to 77% at the end of 2001 and 61% at the end of 2005.
Unlike previous years, the central bank said a large part of this additional non-bank credit to the business sector came as direct credit from abroad, although credit from households and institutional investors also continued to grow.
Credit to households amounted to NIS 235m. for the six month period, taking 17% of the total.