Greek credit expansion continuing
Greeks continue to borrow heavily from financial institutions as household debt to banks reached 89.3 billion euros in the January-July period, which represents 43 percent of the country’s gross domestic product, according to Bank of Greece data. The sum of corporate and household debt, including company bonds, reached 189.9 billion euros or 91 percent of GDP in the first seven months of the year, rising by 20.6 percent compared with the same period in 2006. Corporate debt amounted to 100.5 billion euros, marking a 17.7 percent rise, while household debt in mortgage and consumer loans increased 23.9 percent year-on-year. Credit expansion in the private sector, however, showed a slowdown in the month of July compared with June, as the annual growth rate (July 2006-July 2007) fell to 20.6 percent from 20.9 percent. Across the economy, credit expansion showed a slight acceleration, rising from 12.8 percent in June to 12.9 percent in July. As far as household loans are concerned, total mortgage loans reached 64.3 billion euros at end-July, a 23.8 percent rise from the previous year. In June housing loans had shown a slightly higher growth rate (24.5 percent). Consumer loans reached 29.5 billion euros and their annual growth rate accelerated to 22.5 percent in July from 22.2 percent in June. Borrowing through credit cards posted a 4.4 percent rise with the total balance reaching 7.8 billion euros. Other categories of household loans posted a 22.5 percent increase, with their balance coming to 20.7 billion euros. Corporate borrowing through bond loans totaled 16.4 billion euros at end-July, registering a 35.1 percent rise over the same period last year.
