Contraction of credit continues unabated

Bank of Greece figures revealed on Monday a further contraction in the financing of the Greek economy last month, a result of the general uncertainty hanging over the economy and the drop deposits at the country’s banks.

The total funding of the economy was down 2 percent year-on-year in February, from -1.5 percent in January, while the monthly net flow of total financing was negative by 801 million euros, against a negative flow of 1.261 billion euros in January.

The main factor in that decline was the drop in funding to the state, as the annual rate concerning the general government sector posted a 3.7 percent contraction in February (700 million euros less) against a 0.1 percent increase in January.

In the private sector it was negative by 1.6 percent as funding shrank by a net 101 million euros.

The image was somewhat different for enterprises as there was an 82-million-euro monthly increase in the net flow of funding last month, compared with a 643-million-euro decline in January. However, the flow of credit to private clients and nonprofit organizations dipped by 153 million euros or 2.7 percent in February.