NewsLocalWar in Ukraine creates bleak environment over new loans, growth

War in Ukraine creates bleak environment over new loans, growth

Total new bank loans in Cyprus recorded an increase in 2021 compared to the previous year but the war in Ukraine has created a new environment – one that exacerbates pre-existing headwinds to growth.

This is what the European Commission’s Spring 2022 Economic Forecast which was released on Monday has projected about the EU economy, including that of Cyprus.

“While the EU economy continues to show resilience, Russia’s war of aggression against Ukraine has created a new environment, exacerbating pre-existing headwinds to growth, which were previously expected to subside,” it said.

“It also poses additional challenges to the EU economies related to security of energy supply and fossil fuel dependency on Russia,” it added.

According to the Central Bank of Cyprus data, new loans in 2021 reached €2.9 bln, up from €2.4 bln in 2020, an increase of 22.2%. Compared to 2019, total loans show a small decrease of 1.5%.

New business loans show an increase of 16.1%, amounting to €1.5 bln from €1.3 bln in 2020. Compared to 2019, business loans dropped by 12.5%.

New loans to households increased by 29.8% compared to 2020, amounting to €1.39 bln from €1.07 bln. New loans to households increased by 14.4% compared to 2019.

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