Since 2021, around 19 billion euros of deposits have returned to banks from households and businesses, reflecting an increase of 16%, according to the Bank of Greece’s note on the Greek economy. The central bank’s economic bulletin highlights the significant inflow of deposits from households, mainly in the period 2021-2023, while the “fatigue” observed in the first quarter of 2024 is mainly due to This can be attributed to the shift to alternative savings options that offer higher returns than traditional deposits.
However, data for August was encouraging, encouraging a return to the upward trend, with bank deposits of non-financial corporations and households increasing by 800,000 euros, and household deposits increasing by nearly 1 billion euros. In the same month, the annual growth rate of household term deposits slowed to 6.3%, indicating that the reallocation of funds from overnight deposits to term deposits that occurred in 2023 after monetary tightening may have come to an end. .
The central bank’s note on the Greek economy also said that net deposit inflows from households and businesses amounted to 8.5 billion euros in 2021, 5.5 billion euros in 2022 and 5 billion euros in 2023, bringing the current total from 126.2 billion euros to 146.8 billion euros. It is reported that the euro has increased. The move reflects the growing confidence of depositors in the banking system and the positive outlook for the Greek economy.
On the financing front, the situation is not so optimistic. Following a peak of 12.3% in September 2022, rising interest rates and slowing economic growth have significantly reduced credit expansion to businesses, leading to a decline in loan demand. However, data from the Bank of Greece shows that the annual growth rate of business loans has recovered since September 2023.
In August 2024, bank lending to businesses increased by €100 million, accelerating the annual growth rate to 10.5%. In contrast, lending to households remains sluggish, mainly due to the continued decline in housing loans.
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Data from the Bank of Greece shows that the contraction in household lending will continue until 2024, although it is gradually slowing, mainly due to a decline in mortgage loans. Consumer loans have recorded positive, albeit slow, growth since mid-2022. As of August 2024, the mortgage contraction rate remained stable at -2.7%, and the annual growth rate of consumer loans remained at 5.8%.
AnaCredit data shows that new lending to non-financial companies in 2023 totaled around 9 billion euros, down by one-third from 2022 due to monetary policy tightening, but still below 7 billion euros in 2021. is significantly higher. New business financing disbursements from January to August 2024 amounted to 7.6 billion euros, compared to 5 billion euros in the same period last year.
Source; ANA-MPA
