Credit de­cline will not ex­ceed 2 pct if GDP re­bounds

Kathimerini English - - Front Page - YIAN­NIS PAPADOYIANNIS

Banks ex­pect credit to con­tinue shrink­ing in 2014, al­beit at the slower rate of 2 to 3 per­cent, against a 4 per­cent con­trac­tion last year, with the lat­est Bank of Greece data show­ing a 3.83 per­cent yearly de­cline in loans is­sued in the first 11 months of 2013.

In the pe­riod from 2009 to 2013 the bal­ance of loans to house­holds and en­ter­prises dropped by 39 bil­lion eu­ros due to the cri­sis, while de­posits have fallen by 75 bil­lion eu­ros. Since end-2009 loans to en­ter­prises have dropped by 26.3 bil­lion eu­ros, or by 20.2 per­cent, as in end-Novem­ber 2013 the cor­po­rate loan bal­ance stood at 103.7 bil­lion, from 130.04 bil­lion eu­ros four years ear­lier.

Bank of­fi­cials have told Kathimerini that if the econ­omy con­firms pos­i­tive ex­pec­ta­tions for growth this year, the credit shrink­ing rate may be no more than 2 per­cent on an an­nual ba­sis, with a re­turn to credit ex­pan­sion next year af­ter five con­sec­u­tive years of con­trac­tion, pro­vided the gen­eral eco­nomic land­scape re­mains fa­vor­able in 2015.

They warn, how­ever, that should con­di­tions take another neg­a­tive turn, there will be a re­turn to un­cer­tainty and the econ­omy will re­vert to a de­clin­ing course, af­fect­ing credit flows with mul­ti­ple con­se­quences.

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