SINGAPORE - Bank lending rose 5.9 per cent year on year in July, slowing from June's 7.6 per cent growth, which was the fastest in more than two years as both business and consumer loans improved.

Loans were also higher for the 10th straight month, having notched year-on-year increases since October 2016.

Total bank loans rose to S$632.6 billion from S$597.23 billion in July last year, according to preliminary data from the Monetary Authority of Singapore (MAS) on Thursday (Aug 31).

But compared with the previous month, July lending dipped 0.5 per cent from S$635.52 billion in June, as loans to businesses declined 0.9 per cent.

Bank lending has been picking up pace as the economy improves. The Government narrowed upwards its 2017 gross domestic product (GDP) forecast as second-quarter growth quickened to 2.9 per cent, from 2.5 per cent in the first quarter. The Singapore economy is now forecast to grow by 2 to 3 per cent, from the earlier range of 1 to 3 per cent.

Lending to businesses in July expanded year-on-year for the eighth straight month to S$377.71 billion, a 7.4 per cent rise from a year earlier, with a pickup in loans to financial institutions, general commerce, building and construction, and transport, storage and communication firms.

Meanwhile, consumer loans rose 3.8 per cent year-on-year to S$254.89 billion, mainly on growth in mortgages and bridging loans.