ECONOMY

Credit growth steady in December

The annual pace at which the country’s banks issued new loans in December was steady at 4.2 percent, unchanged from the previous month, but sharply lower than a year earlier, according to Bank of Greece data that were made public yesterday. Lenders pumped 1.8 billion euros of new credit into households and businesses in December, representing an annual increase of 4.2 percent, bringing the total amount owed to 253.4 billion euros. Loan growth in December 2008 stood at 15.9 percent. Bank of Greece, the country’s central bank, said credit expansion to households hit 3.1 percent, or 705 million euros, unchanged from a 3.1 percent growth rate in the previous month. Total credit owed by businesses in the last month of 2009 stood at 133.7 billion euros, rising 5.1 percent year-on-year, versus 5.2 percent in November. Industry was the only sector to show negative credit growth which means that it paid back more money than it borrowed, central bank data showed. High rates of credit expansion, along with robust domestic consumption, were key providers of revenue growth for the country’s bank sector for much of the last decade. Some economists expect loan growth in Greece to stagnate this year, or even dip into negative territory, as the economy enters its second consecutive year of recession.