Credit expansion shrank further in January this year as bank lending towards the private sector of the economy continued falling, the Bank of Greece said on Friday.
The central bank, in a report, said that credit expansion was a negative -0.3 pct in January, from -0.1 pct in December 2010, reflecting lower loans to enterprises and an intensifying de-leverage in Greek households, with new mortgage and consumer loans significantly lower compared with repayment of existing debt.
New funding to enterprises was a net positive flow of 157 million euros, for an annual growth rate of 0.8 pct in January, down from 0.9 pct in December 2010. The manufacturing sector recorded an increase in bank lending with the annual growth rate improving to -1.7 pct in January from -2.7 pct in December, while all other sectors recorded worsening funding conditions (commerce (-3.9 pct in January from -3.5 pct in December and constructions 0.7 pct in January from 1.9 pct in December).
Funding to self-employed was a net positive flow of 6.0 million euros, for an annual growth rate of 0.1 pct in January from 0.2 pct in the previous month.
Lending to households was a negative 315 million euros, for annual growth rate of -1.4 pct in January, from -1.3 pct in December 2010. Mortgage loans recorded an annual growth rate of -0.7 pct, while consumer loans an annual growth rate of -4.1 pct in January.