ECONOMY

Private credit keeps shrinking

With banks? liquidity having all but dried up, loans to businesses and households have slowed to a trickle, according to data for July released on Monday by the Bank of Greece.

The annual growth rate of total credit to the domestic private sector stood at -1.2 percent, unchanged from the previous month. The net flow of total credit to the domestic private sector, depicting new bank loans minus repaid loans, was up by just 13 million euros.

Total private debt to banks stood at 254.2 billion euros at end-July, against 253.5 billion in June and 257.8 billion in December. However, it should be noted the small rise is partly artificial as it incorporates borrowing in foreign currencies.

Of the 254.2 billion total of private debt, 122.3 billion was accounted for by enterprises, up just 0.6 percent. Credit to industry, the economy?s biggest sector, rose 2.1 percent to 25.5 billion, while credit to commerce contracted by 4.5 percent. Credit expansion to shipping was down slightly (-0.2 percent).

Mortgage and consumer credit to households fell 2.7 percent to 115.9 billion euros from 116.1 billion in June and 118.1 billion in December.