Credit expansion: March 2000
06/06/2000 - Press Releases
The most recent data on the evolution of credit expansion are published
in the May 2000 issue of the Bulletin of Conjunctural Indicators, which is released today
(Tables IV.4 through IV.7).
Total credit expansion decelerated in March 2000 and its twelve-month
rate of change stood at 14.6 per cent, compared with 16.3 per cent in February 2000. This
deceleration is attributable to the slower rate of increase in credit both to the public
sector (March 2000: 14.7 per cent, February 2000: 16.4 per cent) and the private sector
(March 2000: 14.4 per cent, February 2000: 16.1 per cent). However, relative to December
1999, credit expansion - especially to the public sector - accelerated. Nevertheless, as
in 1999, the evolution of credit aggregates in the first quarter of 2000 was affected by
the relatively high level of foreign exchange valuation differences included in the
outstanding balances of loans to the private sector, owing to the considerable
appreciation of the Japanese yen (March 2000 over March 1999: 31.4 per cent) and the US
dollar (March 2000 over March 1999: 15.3 per cent). As also noted in a previous press
release regarding the evolution of credit aggregates, about 55 per cent of total foreign
currency loans to the private sector have been concluded in these two currencies, hence
their appreciation against the drachma led to a substantial increase in the outstanding
balances of loans in drachma terms, which, however, does not reflect a corresponding
growth of bank lending. Adjusted for foreign exchange valuation differences, credit
expansion to the private sector stood at 10.4 per cent in March 2000 and total credit
expansion at 13.3 per cent.
As shown by the breakdown of commercial bank lending to the private
sector by branch of economic activity (see Table IV.6), credit expansion to all sectors of
the economy, with the exception of trade, decelerated in the first quarter of 2000.
More specifically, the twelve-month rate of credit expansion to
manufacturing (which includes industrial, mining and small-scale manufacturing firms)
slowed down to 6.4 per cent March 2000, compared with 8.3 per cent in the previous month,
while credit expansion to trade sped up slightly (March 2000: 16.8 per cent, February
2000: 16,4 per cent).
Housing loans declined by 23 billion drachmas or 1.1 per cent in March
2000, compared with the previous month, and their twelve-month rate of increase came to
25.1 per cent, i.e. a considerably lower level than in February 2000 (29 per cent).
However, a larger slowdown was observed in consumer credit growth, which was reduced to 21
per cent in March 2000, compared with 31.7 per cent in February 2000. This substantial
deceleration is related with the measures taken by the Bank of Greece for the twelve-month
period March 1999-March 2000 to contain credit expansion, especially consumer credit.