Credit expansion: OCTOBER 2000
09/01/2001 - Press Releases
The December 2000 issue of the Bulletin of Conjunctural Indicators which is released today provides the latest data on the evolution of credit expansion (Tables IV.4 to IV.7).
The year-on-year rate of total credit expansion remained almost unchanged in October 2000 relative to the previous month and stood at 18.8 per cent (September 2000: 18.6 per cent). This was due to the combined effect of an acceleration of credit expansion to the public sector (October 2000: 15.2 per cent, September 2000:14.3 per cent) and a slowdown of credit expansion to the private sector (October 20000: 26.2 per cent, September 2000: 27.7 per cent). It should be noted that, as was also the case in previous months, credit aggregates have been affected by the relatively high level of foreign exchange valuation differences included in the outstanding balances of loans to the private sector, as a result of the considerable appreciation of the US dollar (October 2000/October 1999: 30 per cent) and the Japanese yen (October 2000/October 1999: 24.8 per cent) [1]. Adjusted for valuation differences (estimated at around 670 billion drachmas), credit expansion to the private sector stood at 21.5 per cent in October 2000, while total credit expansion came to 17.3 per cent.
A sectoral breakdown of commercial bank lending (see Table IV.6) shows that the year-on-year growth rate of loans to firms declined in October 2000 relative to the previous month, whereas the growth rate of loans to households (consumer and housing loans) increased. However, compared with December 1999, credit expansion to both business firms and households accelerated.
Specifically, lending to manufacturing (which includes industrial, mining and small-scale enterprises) increased by 11.8 per cent in the January-October 2000 period, compared with 8.6 per cent in the corresponding period of 1999, with its year-on-year growth rate rising to 14.5 per cent in October 2000, from 11.3 per cent in December in 1999.
Credit expansion to trade accelerated considerably in the January-October 2000 period, especially after April 2000, when the measures taken by the Bank of Greece to contain credit expansion expired. In October, however, the year-on-year rate of increase in lending to trade slowed down to 26.6 per cent, compared with 32.4 per cent in September 2000 and 6.5 per cent at the end of 1999.
Regarding loans to households, the rate of increase in both consumer and housing loans accelerated relative to December 1999. More specifically, the year-on-year rate of increase in housing loans stood at 31 per cent in October 2000, against 26.9 per cent in December 1999, while the growth rate in consumer loans reached 35.1 per cent in October 2000, from 31 per cent in December 1999. It is noted that since April 2000, when measures to contain credit in general and consumer credit in particular expired, this rate has been displaying an upward trend.
[1] About fifty per cent of foreign currency loans to the private sector are denominated in US dollars and Japanese yen. The appreciation of these currencies against the drachma led to a significant increase in the outstanding balances of loans in drachma terms; this, however, does not imply a corresponding rise in bank lending.