ECONOMY

Drop in bank deposits to slow in 2011

A reduction in Greek bank deposits is likely to continue this year but at a slower pace than in 2010 as households dig into savings to get through the crisis, according to the National Bank (NBG).

?The upkeep of private sector spending is likely to account for a drop of 16 billion euros in deposits (for 2011) out of a total estimated reduction of 19 billion euros,? NBG said in a report published on Tuesday.

In 2010, bank deposits fell by some 40 billion euros, or 14 percent, with the biggest outflow taking place in the first half of the year as investors put their money in lenders abroad while others took it home on increased uncertainty about the economy and the Greek bank sector.

Looking ahead, the lender said that bank deposits could grow by an annual pace of five percent as of next year on the condition that the economy returns to a growth path and credit expansion matches increases in real gross domestic product.