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Greek household credit growth slows to 3.9 pct y/y

Source: Reuters - Tue 27th Oct 2009

Growth in Greek household borrowing slowed further to an annual 3.9 percent in September from 4.7 percent in August, the country's central bank said on Tuesday.

A sharp slowdown in economic activity coupled with tighter credit conditions are eating into the loan growth that had fuelled consumption and economic expansion in Greece and boosted bank earnings.

The Bank of Greece said on Tuesday household loan balances grew by 529 million euros ($787.4 million) in September. Mortgages grew at a slower 4.4 percent annual pace,or 403 million euros, from 4.8 percent in August and 11.5 percent in December.

Consumer credit expanded by 3.3 percent, down from 4.8 percent in August and 16 percent in December.

In the 16-nation euro zone, credit to households and businesses shrank in September for the first time since records began in 1991, the European Central Bank said earlier on Tuesday.

Greek authorities have sought to keep the pace of credit expansion above 10 percent this year, and have launched a 28 billion euro bank support package to keep the economy adequately funded.

The Bank of Greece said credit to business also slowed, to an annual 6.8 percent clip in September from 7.3 percent in August and 18.7 percent in December.

Greece's economy, representing about 2.5 percent of the eurozone, is seen slipping into recession in 2009 after years of 4 percent annual growth, the central bank has said.

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