Private lending collapse.

Bank lending to the private sector has crashed by 90% this year, illustrating how investment and day-to-day credit-based operations have disappeared from the economy amid record inflation and unprecedented interest rates. Further complicating the situation is that the cash-strapped government has readily been borrowing to meet its needs, meaning that banks have had a willing borrower on hand, despite the collapse of private sector demand for loans.

Further illustrating this is the fact that lending by Islamic banks and the Islamic banking arms of conventional banks - which do not count the government as a major client - saw a smaller drop in private borrowing because they were more willing to incentivise private lending. However, an almost 50% drop for the Islamic finance sector is no laughing matter, and bodes poorly for the economy and any claims that recovery, let alone growth, is around the corner. This is because investment-based growth and contraction usually take time to become fully visible in other economic indicators, as the new cash must first be put to use, while in the case of falling...