Macro roundup: Spending and lending

Retail sales continue strong growth; demand for business and housing loans increase

Feb 4, 2022

Retail sales continued to grow strongly in November, increasing 19 percent from a year earlier, while volume rose 14.7 percent. There’s a bit of a base effect at play, since Greece was going back into lockdown in November 2020, but both the turnover and volume indices are well above their pre-pandemic levels.

All the major categories increased, except for supermarkets.

Other data:

Greece’s purchasing managers’ index dipped to 57.9 in January, its lowest reading in six months, from 59 in December, according to IHS Markit.

A reading above 50 indicates improving operating conditions, so the indicator is still in firmly expansionary territory. Output and new order growth both slowed, but the rate of job creation reached a series high. Input prices rose at a sharper pace, with firms passing on the higher costs.

Meanwhile, the fourth-quarter bank lending survey adds a bit more colour to the picture we’re seeing about credit conditions. Lenders surveyed by the central bank said that credit standards remained the same for the three categories of loans — housing, consumer and business.

At the same time, they reported that demand strengthened for both home loans and loans to non-financial corporations, according to the Bank of Greece.

Both of these categories saw a small increase in the share of rejected loan applications.

Earlier this week, I took a look at the composition of lending to businesses, which last quarter surged for larger corporations in industrial sectors.

Grecology

Funding Greek industry

In our last roundup we noted the big drop in lending to small and medium-sized businesses in December. But what made that drop even more noteworthy was that there was a huge increase in lending to businesses overall. In fact, the 1.5 billion-euro increase in lending to non-financial corporations was the second largest since 2010 — with the biggest coming…

2 years ago · 3 likes · Marcus Bensasson

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Next week’s key releases

Wednesday, Feb. 9:

December commercial transactions (Elstat)

Thursday, Feb. 10:

December industrial production (Elstat)

Elsewhere on the web

The International Monetary Fund has published a working paper on Greece’s investment gap.
Facebook is close to buying a Greek startup.
A warning about liquidity risk on the Hellinikon property development.
Georgia’s mountainous cryptocurrency problem.

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