Press Releases

Credit expansion: SEPTEMBER 2000

21/12/2000 - Press Releases

The November 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).

Total credit expansion accelerated in September 2000 relative to the previous month and its year-on-year rate of change stood at 18.6 per cent (August 2000: 16.5 per cent). This development was largely due to the higher rate of increase in credit to the private sector (September 2000: 27.6 per cent, August 2000: 24.1 per cent), while credit expansion to the public sector also accelerated (September 2000: 14.3 per cent, August 2000: 12.9 per cent). It should be noted that the evolution of credit expansion has been affected by the relatively sizable 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 (September 2000 over September 1999: 25.1 per cent) and the Japanese yen (September 2000 over September 1999: 21.5 per cent)*. Adjusted for valuation differences, estimated at about 600 billion drachmas, credit expansion to the private sector came to 23.3 per cent in September 2000, and total credit expansion reached 17.2 per cent.

A sectoral breakdown of commercial bank lending (see Table IV.6) shows an acceleration of the twelve-month rate of increase in all categories of loans in September 2000 compared with August 2000. The only exception was housing loans, which stood at August 2000 levels. Compared with December 1999, credit expansion to enterprises has been considerably stronger than to households (housing and consumer loans).

More specifically, credit to industry (which also includes mining and small-scale enterprises) rose by 11.5 per cent in the January-September 2000 period, compared with 6.3 per cent in the corresponding 1999 period. Its twelve-month rate of increase stood at 16.8 per cent in September 2000, from 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, after the measures taken by the Bank of Greece for the containment of bank credit had expired. The twelve-month rate of increase in credit to trade came to 32.4 per cent in September 2000, compared with 6.5 per cent at end-1999.

As regards credit extended to households, the rate of increase in housing loans rose compared with December 1999, while the rate of increase in consumer loans remained almost unchanged. More specifically, the twelve-month rate of increase in housing loans accelerated to 30.4 per cent in September 2000, from 26.9 per cent in December 1999, while the rate of increase of consumer loans was 32% in September 2000, compared with 31% in December 1999. It should be noted that, since April 2000, when the measures for the containment of credit in general and consumer credit in particular expired, this rate has been showing an upward trend.

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*It should be noted that around 50 per cent of foreign currency loans to the private sector has been contracted in those two currencies. Thus, there appreciation leads to a considerable increase in the outstanding balances of the drachma value of such loans, but does not reflect a corresponding increase in bank credit.

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