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Credit expansion: NOVEMBER 2000

02/02/2001 - Press Releases

The January 2001 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 decelerated to 17.3 per cent in November 2000 relative to the previous month, when it stood at 18.9 per cent. This was due to lower rates of increase in credit to both the public sector (November 2000: 13.5 per cent, October 2000: 15.2 per cent) and the private sector (November 2000: 25.2 per cent, October 2000: 26.5 per cent). As in previous months, credit expansion has been affected by the relatively sizable foreign exchange valuation differences included in the outstanding balances of bank loans to the private sector, as a result of the considerable appreciation of the US dollar (November 2000 over November 1999: 21.1 per cent) and the Japanese yen (November 2000 over November 1999: 13.4 per cent) [1]. Adjusted for valuation differences, which are estimated at around 500 billion drachmas, credit expansion to the private sector came to 21.9 per cent in November 2000 and total credit expansion reached 16.2 per cent.

A sectoral breakdown of commercial bank lending in November 2000 (see Table IV.6) shows that, compared with October 2000, the twelve-month rate of credit expansion to business firms decelerated, while credit expansion to households (housing and consumer loans) remained almost unchanged. However, compared with December 1999, credit expansion to both firms and households accelerated.

More specifically, credit to industry (which also includes mining and small-scale manufacturing firms) rose by 15.2 per cent in the January-November 2000 period, compared with 13.9 per cent in the corresponding 1999 period, and its twelve-month rate of increase came to 12.5 per cent in November 2000, against 11.3 per cent in December 1999.

Credit expansion to trade accelerated considerably in the first nine months of 2000, especially from April 2000 onwards, when the measures taken by the Bank of Greece for the containment of bank credit ceased to be in effect. However, as from October 2000, this rate seems to be decelerating, as the twelve-month rate of increase in credit to trade came to 26.7 per cent in November 2000, i.e. to about the same level as in October 2000, against 32.4 per cent in September 2000 and 6.5 per cent at end-1999.

As regards credit to households, the rate of increase in both housing and consumer loans accelerated, compared with December 1999. In particular, the twelve-month growth rate in housing loans came to 30.7 per cent in November 2000, against 26.9 per cent in December 1999, while the rate of increase in consumer loans stood at 36.9 per cent in November 2000, compared with 31 per cent in December 1999. It should be noted that, since April 2000, when the measures for the containment of credit expired, this rate has been showing a strong upward trend.



[1] About 50 per cent of foreign currency loans to the private sector has been contracted in those two currencies, the appreciation of which leads to a significant increase in the outstanding balances of the drachma value of such loans; this, however, does not imply a corresponding increase in bank lending.

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