ECONOMY

Credit growth slows on all fronts

The annual pace of credit expansion to Greek households slowed to 14 percent in November from 15.1 percent in the previous month as loan growth to businesses also decelerated, according to Bank of Greece data made public yesterday. Robust credit expansion that fueled consumption and growth in recent years is decelerating as the economic slowdown bites. Bank of Greece, the country’s central bank, said household loan balances grew by 500 million euros in November. Mortgages grew by a slower 12.3 percent annual pace, or 269 million euros, from 13.7 percent in October. Consumer credit expanded by 17.8 percent or 233 million from 19.1 percent in October. The government projects economic growth will slow to 2.7 percent in 2009 from 3.2 percent this year but economists say this is optimistic given the global economic downturn. A downward revision to the growth figure is likely to take place in January, according to ministry sources. The Bank of Greece said credit to business expanded at an annual 22.2 percent clip in November or by 940 million euros, slowing from 24.1 percent in October. The central bank wants the pace of credit expansion to stay above 10 percent next year, and the government has announced a 28-billion-euro liquidity support package to ensure the economy is adequately funded. (Kathimerini, Reuters)