According to latest BoG data, credit contraction in the Greek market marginally decelerated to 3.4% y-o-y in April from 3.5% March with balances reaching €226.3bn corresponding to 119.2% of GDP. Loan balances eased 0.9% m-o-m (for tenth consecutive month) with net deductions climbing to €1,626m in April from €365m in March from €949m in February. April negative flow mainly reflects extended corporate lending net deductions of €1,190m and household outflows of €431m.

Individuals & private non-profit institutions’ lending growth remained on negative grounds, with balances reaching €104.2bn, down 0.4% m-o-m and 3.7% y-o-y (Mar: -3.6%). Monthly net deductions continued unabated for thirty-seventh consecutive month rising to €431m in April from €254m in March.

Housing loan balances contracted 0.3% m-o-m and 3.2% y-o-y (Mar: -3.2%) to €73.3bn. Deductions persisted for thirty-third month in a row at €225m in April and €117m in March.

Consumer credit slipped 0.6% m-o-m and 5.4% y-o-y (Mar: -5.3%) to €29.3bn. Monthly net deductions stood at €181m in April from €159m in March.

Corporate lending outstanding balances retreated 1.4% m-o-m and 3.4% y-o-y (Mar: -3.6%) to €108.5bn, Monthly net flow remained negative for third month in a row with net deductions jumping to €1,190m in April from €133m in March.

Loans to sole proprietors stood at €13.6bn, down 0.1% m-o-m and 1.5% y-o-y (Mar: -2.0%). Monthly net flow remained at extremely low levels with marginal outflows of €5m in April from inflows of €21m in March.

Lending constraints of Greek banks and tight liquidity conditions coupled with the prevailing recession and consumers’ reluctance to involve in any lending activity are the key reasons for negative credit expansion, on continued outflows in the household lending sector and negative – yet volatile – corporate lending flow. A deceleration of credit contraction and potential net additions may be evident towards the end of the year, when recession is expected to bottom out.