ZF English

Economy unlikely to rebound unless lending market improves

11.07.2010, 23:12 6

As loans are very expensive and difficult to get, people preferto adjust spending and give up goods not strictly important tothem; however, the lack of domestic consumption is killingcompanies' businesses and stalling economic rebound.
On the other side of the fence, bankers are citing the high risksand uncertainty that in fact discourage clients from taking outloans, while banks can comfortably invest their cash in governmentsecurities, for which they also ask for increasingly high yields.Non-governmental loans saw an uninterrupted decline in 2009 and arenow recording anaemic rises, whilst the volume of loans granted tothe state is climbing at a two-digit pace. Consumption continuesits free fall, with messages coming from bankers and the governmentnot likely to encourage recovery.

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