Pace of credit contraction increases in April

The funding deficit is growing in the Greek economy, as there was a sharper credit contraction in April, data from the Bank of Greece showed on Tuesday.

The pace of financing Greek households and enterprises stood at -1.9 percent last month, from -1 percent in March and -0.9 percent in February.

The flow of credit turned negative by 1.2 billion euros in April from the positive amount of 217 million euros in March. The negative flow means that loans repaid outweighed those issued, after factoring in loan write-offs and sales of nonperforming loans by banks.

In practice the fresh credit issued is offset by the burden of the increased write-offs and payments mostly by enterprises.

Data analysis showed that the funding flow to the economy’s basic domains last month was negative by 2.4 percent for industry and by 1.7 percent for construction. At the same time the financing rate for tourism was marginally positive at 1 percent, while in commerce the rate was zero, against a positive 1 percent in March. The sector with the lowest funding rate in comparison with last year was electricity and water, which declined 12.6 percent.