ECONOMY

In Brief

Household credit growth slows to 1.5 percent Growth of Greek household borrowing weakened further in June, slowing to 1.5 percent in annual terms as the downturn suppressed demand for credit, the country’s central bank said yesterday. The Bank of Greece said the pace of loan growth to households had decelerated from 2 percent in May and 3.1 percent in December. Recession and tighter credit conditions are eating into the borrowing that fueled consumption and economic expansion in previous years. Greek economic output shrank 2 percent last year and is seen contracting by as much as 4 percent in 2010, as austerity measures agreed to by the government with its creditors, the European Union and the International Monetary Fund, to shrink the budget deficit – including tax hikes and wage and pension cuts – take their toll. (Reuters) AIA’s first-half passenger traffic flat year-on-year Passenger traffic at Athens International Airport (AIA) was flat year-on-year in the first half and the number of flights fell 3.5 percent as hard-pressed Greeks cut back on travel, AIA said yesterday. Greek officials are hoping for a late surge in arrivals to boost revenues in the key tourism sector, hit by a recession at home and a slump in bookings as anti-austerity protests kept some visitors away. AIA said passenger traffic rose 0.1 percent to 7.2 million in the first six months of 2010, in line with the average performance in European airports, where traffic slipped 0.3 percent and the number of flights dropped 3.8 percent. «Total traffic in January-June was contained at 2009 levels thanks to a strong first quarter, keeping our airport above the average performance of large European airports,» AIA Chief Executive Yiannis Paraschis said in a statement. «But a weakening trend that started in the second quarter and is due mainly to the domestic market is indicative of the challenges our sector is facing,» he said. AIA said international traffic rose 0.4 percent year-on-year to 4.5 million passengers. A 10-15 percent drop in tourism this year is estimated, as repeated strikes grounding flights have scared tourists away. (Reuters) Bourse profit drop Hellenic Exchanges announced yesterday that its consolidated net after-tax profits in the first half of 2010 amounted to 10 million euros, compared to 16.9 million euros in the same period last year, reduced by 41 percent. Notably, this year’s results include 7.9 million euros in «extraordinary social responsibility tax,» which was imposed on businesses on their profits for fiscal year 2009. (Reuters) Cyprus deficit Cyprus’s general government deficit narrowed to 1.9 percent of gross domestic product on a cash basis in the first half of 2010, compared to 2.5 percent in the corresponding period last year, the Finance Ministry said yesterday. Revenue rose 7.04 percent in the first half, while expenditure was up by 3.49 percent, the ministry said on its website. The overall cash shortfall was 335.2 million euros in the first half, compared to a gap of 417.7 million euros in the first half of 2009. Cyprus’s cash deficit in 2009 was 6.44 percent of GDP, the table prepared by the budgets and fiscal control directorate of the ministry said. (Reuters) Romania budget gap Romania recorded a consolidated budget deficit of 18.1 billion lei ($5.5 billion) at the end of June, just below an International Monetary Fund-agreed ceiling of 18.2 billion, the Finance Ministry said yesterday. Ministry data showed revenues edged down 0.1 percent on the year to 77.2 billion lei, while spending grew 4 percent. «We don’t know how they managed to meet the target as budget revenues have underperformed expectations,» said Ionut Dumitru, chief economist at Raiffeisen Bank in Bucharest. (Reuters) Albanian rates Albania’s central bank cut interest rates to 5 percent from 5.25 yesterday, Governor Ardian Fullani told reporters, following the approval of a revised state budget that cuts spending and the deficit. The cut in the bank’s key repo rate is the first since October last year and brings it down to levels last seen in March 2005. (Reuters)