A higher growth pace had been last registered in June 2010, namely exactly before the government announced the tough fiscal adjustment moves.
This May’s increase particularly came from the segment of individual clients, where forex loans took a leap, showing thus that the promotions carried out for bankers for mortgages did not go unanswered.
Private lending rose by 1.5% on the month in May and reached RON207.7 billion (EUR49.2 billon), with the volume of new funding released by bankers exceeding client repayments for the second month in a row in 2011. Even eliminating the impact of inflation, the real increase reverted to positive territory, to 1.3%.
While still modest, the growth pace accelerated from April, when just a small increase of 0.3% (in nominal terms) had been posted. The May increase of non-governmental lending is largely due to the fastest advance of forex funding.
“The euro was right from the beginning at an advantage against leu as there were expectations about the additional benefit of the leu appreciation at the time of loan repayment,” says Florian Libocor, chief-economist with BRD I believe these expectations may ease once the exchange rate stabilization gains momentum. At any rate, lending resumption will be tightly related to the rebuilding of confidence in the economy.”
The volume of forex loans climbed by 2.2% last month and reached the equivalent of RON129 billion (EUR30.7 billion). Foreign currency lending to the individual customers rose faster, by 2.5%.
The amount of leu loans rose by only 0.3% from the previous month, to RON78.4 billion (EUR18.6 billion). Still, leu lending expanded in real terms for the second consecutive month after the negative clips posted at the start of the year.
“The good sign comes from lei lending to consumers. I believe we can speak of a tendency of lei loan demand improving, which would aid boost private consumption and eventually economic growth. (…),” comments Nicolaie Chidesciuc, chief-economist with ING Bank.
However, analysts are cautious as regards a speedier lending revival in the second half of this year, as indebtedness, particularly on the segment of individuals, is still high and inflation still has a significant impact over their purchasing power.
“(…) Thus, we cannot speak this year about a lending revival in the true sense of the word, but rather about a rising appetite for a lending restart, which could produce notable effects as late as 2012,” says Melania Hancila, chief economist with Volksbank. (EUR1=RON4.2192)