ECONOMY

Lending slows to over 3-year low

Greece’s credit expansion slowed in January to the slowest pace in more than three years, despite lenders pumping money into key sectors such as shipping, figures showed yesterday. Data from the Bank of Greece, the country’s central bank, showed that total new loans issued in January rose by 15.1 percent to 250.2 billion euros. The figure slowed from 16.4 percent in December and 18.2 percent in November. Central bank officials have said they want the pace of credit expansion to remain above 10 percent this year. However, some industry sources admit this is unlikely to happen as the economy slows under the weight of the global crisis. Greece’s economy is expected to come almost to a standstill this year and show an annual expansion rate of 0.2 percent for 2009, according to the European Commission. The Greek government is more optimistic, placing the forecast growth rate at 1.1 percent. Loans to households are slowing down considerably, with the number of new mortgages issued in January hitting 121 million euros, compared with 867 million euros in the previous month. Regarding lending to businesses, the central bank claims lenders last month further opened the lending tap to industries, such as the industrial and trade sectors. «Loan growth in two of the most important sectors in terms of financing – industry and trade – remains considerably higher than the December annual rate,» the bank said in a statement. Earlier this week, several chambers of commerce called on bank authorities to intervene and help businesses meet their finance needs, saying, «They can no longer endure this situation.» At the end of January, just over 11 billion euros had been lent to the shipping sector, 20 percent more than December, which recorded an annual increase of 16.7 percent.