In line with analysts’ expectations, consumer lending in Bulgaria shrank precipitously in the year up to June 2009, when the growth decelerated almost sixfold to 450.6 million leva compared to 2.184 billion leva in the year-ago period, according to central Bulgarian National Bank figures.

The increase slowed from a staggering 47.3 per cent over the 12 months to June 2008 to an anemic 6.6 per cent in the subsequent period, retreating to the 2006 level of 6.3 per cent year-on-year.

Home loans put up the best fight against the downturn, surging by 1.289 billion leva year-on-year in June 2009, or 19.1 per cent. Still, this comes against a 2.352 billion leva rise, or 53.3 per cent, in the previous period.

Corporate loans staged a threefold decrease, rising by 2.792 billion leva, or 10.1 per cent year-on-year, as at end-June. For comparison, a year before the portfolio expanded by 9.876 billion leva, or 55.5 per cent.

Consumer loans added up to 7.253 billion leva in the six months, going back to just below their end-2008 level. This type of loans took the lengthiest slide of six months in a row, from October to April, when they managed to break the negative run.

In June, consumer loans increased by 0.34 per cent on the month, or 24.682 million leva, as home loans grew by 0.8 per cent, or 64.2 million leva, to 8.054 billion leva. Corporate loans gained 0.12 per cent, or 36.7 million leva, which left them at 30.458 million leva altogether.

The loan market grew by a cumulative 11.8 per cent year-on-year as at end-June versus 32.9 per cent year-on-year at the end of 2008.

As the economic meltdown spawns weakening economic activity, hurting both domestic consumption and foreign demand, full-year forecasts have been reduced to six to seven per cent from the 10 to 15 per cent projected at the start of the year.

Household and business loans in the eurozone grew by a record-low 1.8 per cent in May.

Source: Dnevnik.bg