ECONOMY

Consumer and housing credit still accelerate

The Bank of Greece may worry over the continuing rapid growth of consumer and housing loans but it is undeniable that they provide a much-needed boost to economic growth by keeping private demand high. According to central bank data published yesterday, the annual rate of total credit expansion accelerated in September to 9.9 percent, from 7.8 percent in August. While credit to the government actually declined, by 1.6 percent, credit to businesses and households grew 16 percent. The outstanding balance of housing loans stood at 30.832 billion euros at the end of September. Moreover, consumer loan growth stood at 39.1 percent year-on-year in September, from 38.4 percent in August, with the outstanding balance at 15.722 billion euros in September. Annual credit card credit growth was 23.7 percent in September, with an outstanding balance of 7.258 billion euros, up from 22.9 percent in August, while consumer loans against documents grew 35.5 percent, to a balance of 2.555 billion. Perhaps more worryingly, personal loans, often taken to pay back debt, grew at a rate of 66.6 percent in September, and their outstanding balance was 5.908 billion euros. The rate of growth, however, was slightly down from August (67.5 percent). Total credit to businesses expanded 8.6 percent in the year to September, with the outstanding balance reaching 65.419 billion euros. The greatest acceleration of credit was to the tourism sector (17.9 percent) and the outstanding balance was 3.8 billion euros. Credit to commerce expanded 10.4 percent from 8.2 percent in August and the outstanding balance was 18.3 billion euros. By contrast, credit to industry expanded just 1.3 percent in the year to September, still an acceleration from 0.4 percent at the end of August, and the outstanding balance reached 15.743 billion. Total deposits at the end of September were 123.47 billion euros, while investments in repos stood at 10.1 billion. The Bank of Greece also said that in June housing prices in Athens had risen 0.4 percent relative to June 2003, although they had fallen 2 percent relative to end-2003.