Low confidence keeps Greek credit growth negative

Greek credit growth stuck deep in negative territory

Greek credit growth to the private sector remained firmly entrenched in negative territory in October, in a trend likely to continue until the end of next year, economists say.

Figures published by the Bank of Greece, the country's central bank, showed that lending by the country's banks to households and businesses contracted by an annual rate of 1.4 percent in October, versus a drop of 1.2 percent in the previous month.

Lending to construction companies fell by 2.4 percent, while credit to real estate businesses contracted by 0.6 percent.

Despite improving economic conditions in Greece, credit growth has not turned positive since the start of the country's economic crisis more than eight years ago. Banks have started to issuing slightly more credit, but low confidence among households and businesses is preventing a pick up in demand for new loans.

Large businesses are also deciding against new loans, putting off more agressive steps, due to uncertainty stemming from the global environment, say economists.