**Cyprus Loan Growth Picks Up as Deposits Reach €59.3 Billion**
In a positive sign for the Cypriot economy, both deposits and loans in Cyprus experienced net increases in August, according to the latest data released by the Central Bank of Cyprus (CBC) on Friday. The figures indicate a notable acceleration in annual credit growth, alongside a rise in total deposits, which reached €59.3 billion.
During August, total deposits in Cyprus rose by a net amount of €171.5 million. This increase, however, is a slowdown compared to the previous month, where deposits saw a net rise of €562.3 million in July. Despite the deceleration in month-to-month growth, the annual growth rate for deposits improved to 6.5%, up from 6.2% in July.
The increase in deposits was primarily attributed to residents of Cyprus, who contributed €175.3 million to the total. This growth was notably driven by a €60.2 million rise in deposits from non-financial corporations. In contrast, household deposits experienced a slight decline, dropping by €1.9 million. Other domestic sectors collectively saw an increase of €117 million in their deposits.
On the lending front, total loans in Cyprus recorded a net increase of €114.6 million in August, marking a significant turnaround from the previous month, which had seen a net decline of €68.7 million in July. This resurgence in loan growth has pushed the annual growth rate to 11.8%, up from 11.1% in the prior month. The total outstanding stock of loans now stands at €28.5 billion.
Loans to residents of Cyprus increased by €36.5 million during August. Within this category, lending to households rose by €12.6 million, while loans to non-financial corporations saw a more substantial increase of €32.4 million. However, loans to other domestic sectors experienced a decrease, falling by a combined €8.5 million.
The data reflects a growing confidence in the Cypriot economy, as both businesses and individuals appear to be engaging more actively in financial transactions. The increase in deposits suggests that residents are saving more, while the rise in loans indicates a willingness to invest and spend, which could contribute to economic growth in the coming months.
As Cyprus continues to navigate its economic landscape, these trends in deposits and loans will be closely monitored by financial analysts and policymakers alike. The Central Bank of Cyprus is likely to use this data to inform its monetary policy decisions, aiming to foster a stable and growing financial environment.
Overall, the figures from August present a mixed but encouraging picture of the financial health of Cyprus, with both deposits and loans on the rise, signaling a potential rebound in economic activity.