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Credit expansion: AUGUST 2000

10/11/2000 - Press Releases

The October 2000 issue of the Bank’s Bulletin of Conjunctural Indicators, released today, provides the latest data on the evolution of credit expansion (Tables IV.4 to IV.7).

Total credit expansion accelerated in August and its twelve-month rate of change stood at 16.5 per cent (July 2000: 15 per cent). This acceleration was mainly due to higher rates of increase in credit to both the public sector (August 2000: 13 per cent, July 2000: 11.8 per cent) and the private sector (August 2000: 24.1 per cent, July 2000: 22 per cent). Credit expansion has, however, been affected by the relatively sizeable foreign exchange valuation differences included in the outstanding balances of loans denominated in foreign currencies to the private sector, as a result of the considerable appreciation of the Japanese yen (August 2000 over August 1999: 25.2 per cent) and the US dollar (August 2000 over August 1999: 21.8 per cent).* Adjusted for valuation differences, which are estimated at around 600 billion drachmas, credit expansion to the private sector came to 19.8 per cent in August 2000, while total credit expansion reached 15.1 per cent.

A sectoral breakdown of commercial bank lending (see Table IV.6) shows that credit expansion in August, compared with July, accelerated towards all sectors of the economy. Relative to December 1999 levels however, a faster credit expansion was only noted towards enterprises, while the year-on-year growth rate of loans to households (consumer and housing loans) remained unchanged.

More specifically, credit to the manufacturing sector (which comprises industrial, mining and small-scale manufacturing firms) rose by 6.7 per cent in the first eight months of 2000, compared with 5.1 per cent over the same period of 1999, while its twelve-month rate of increase stood at 13 per cent in August 2000 (December 1999: 11.3 per cent).

Credit expansion to trade accelerated considerably in the first eight months of the year, particularly from April onwards, once the measures taken by the Bank of Greece to contain credit expansion ceased to apply. The twelve-month rate of increase in credit to trade accelerated to 27.4 per cent in August 2000, compared with 6.5 per cent at end-1999.

Regarding loans to households, a speed-up was noted in the growth rate of housing loans, while consumer credit growth decelerated. More specifically, the twelve-month rate of increase in housing loans stood at 30.3 per cent in August 2000 (December 1999: 26.9 per cent), while the increase in consumer credit slowed to 26.8 per cent in August 2000 from 31 per cent in December 1999. A slightly upward trend has been observed, however, in consumer credit growth from April 2000 onwards, after the measures taken to contain credit expansion and consumer credit expansion in particular were lifted.

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*Almost 50 per cent of foreign currency loans to the private sector have been concluded in these two currencies. Hence, their appreciation against the drachma has 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.

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