Households get deeper into debt
Fears that Greek households are becoming increasingly indebted, at a very fast pace, did not abate after yesterday’s publication of credit data by the Bank of Greece. Data concerning April 2002 revealed that credit to the private sector – enterprises and households – continued to increase at an annual pace exceeding 20 percent (21.6 percent in April). But, whereas loans to farmers actually fell 19.2 percent and loans to industry increased by 8.5 percent, loans to commerce rose 25.3 percent, mortgages increased 40.8 percent and consumer loans increased 35.9 percent. The Bank of Greece has repeatedly warned against the fast rise in credit, especially to households. The level of indebtedness is still below that of other European countries and the USA, but the gap is closing fast – too fast, according to the Bank of Greece. Breaking down household loans, one sees that credit from credit cards has increased at the fastest annual pace (51.8 percent), while consumer loans against documents have increased 34.7 percent and personal loans 14.9 percent.