Monetary policy and credit concentration impact Greek economy

Central banks, including the European Central Bank (ECB) and the US Federal Reserve, are raising interest rates to combat inflation. The ECB has increased rates from 2% to 2.5%, with further hikes expected to reach 3% by late 2026. The Federal Reserve has also implemented a 25 basis point increase, bringing its range to 3.75%–4%. These measures are expected to keep interest rates high until at least mid-2027 as inflation targets are pursued.

In Greece, the impact of these monetary policies is visible in credit expansion data. While business lending grew by 12.5% in August, partly due to low-interest loans from the Recovery Fund, lending to individuals decreased to 2.4%.

Additionally, concerns have been raised regarding the concentration of corporate bank lending in Greece. Approximately 42.9% of corporate credit is concentrated within just 1.2% of businesses. The International Monetary Fund (IMF) has noted that this concentration in a small number of large companies poses structural risks to the financial sector and may hinder the growth of smaller enterprises.