ECONOMY

Credit growth keeps slowing in July

Greece’s credit expansion decelerated in July to an annual pace of 6.6 percent, from 7.4 percent in June, as the economy continues to slow. Data from the Bank of Greece, the country’s central bank, showed new loans totaling 847 million euros were disbursed to Greek bank customers in July, raising total debt among households and businesses to 250.4 billion euros. Greek banks have kept a tight grip on lending out of fear that customers may not be able to repay loans as the economy is likely to head into recession this year. The banks themselves, however, blame the lending slowdown on hesitant customers who have put off spending due to the economic downturn. Data showed a lending drop-off among both businesses and households. Credit growth to businesses in July decelerated to 7.9 percent year-on-year, from 8.6 percent, to 132.1 billion euros. Outstanding debt to households, the majority of which relates to home loans, hit 118.3 billion euros at the end of July, up 5.2 percent versus a growth rate of 6.2 percent in the previous month. Greek authorities have sought to keep the pace of credit expansion above 10 percent this year and came up with a 28-billion-euro bank support package to keep the economy adequately funded. But the pace of credit expansion to the private sector is now seen slowing to between 5 and 6 percent by the end of the year, the central bank has said.