ECONOMY

Credit expansion slows down in May

Total credit expansion slowed marginally in May, in comparison with the previous month, on a drop in the mortgage market but remained well above the growth rate seen in the same month last year. Provisional data from the Bank of Greece, the country’s central bank, showed that credit expansion in the country slowed to an annual pace of 17.2 percent in May from 17.5 percent in April. Credit to households and enterprises picked up marginally to 22 percent from 21.9 percent in the previous month. «Credit to the private sector continued at a brisk pace, due to a pickup in business borrowing. Household borrowing showed a deceleration, mostly felt in mortgages. This reflects tighter credit conditions and a squeeze on household budgets,» National Bank economist Nicholas Magginas told Reuters. Loan growth to businesses picked up to 24.5 percent year-on-year from 23.7 percent in April but slowed to 19.3 percent in May from 19.9 percent in credit issued to households. «Credit to households is expected to show a stronger deceleration in the third quarter,» added Magginas. Total credit expansion in May, however, remained well above last year’s expansion rate of 12.1 percent year-on-year, according to the central bank.