The FINANCIAL — The KfW credit market outlook confirmed for the third quarter in 2011 a slight decline of new lending business with enterprises and self-employed professionals by -0.8% compared to the previous year figure.
Thus the indicator, which is calculated by KfW for the German newspaper Handelsblatt, showed a stabilisation of the situation on the credit market. In the second quarter of 2011 new lending business shrank by another 5% year over year. In the coming half year new lending business is likely to further stagnate – and then to begin to decline.
In the third quarter the access of enterprises to loans remained quite good, however signs of constraints emerged with interest rates on high-risk loans increasing on a broad scale during this period. For the ongoing fourth quarter, the KfW credit market outlook forecasts even a moderate increase in new loan business. However, this is primarily due to technical effects as well as the currently still comparatively favourable propensity of enterprises to invest and precautionary additional demand for short-term liquidity.
The imminent economic slowdown in Germany – in its base scenario for 2012 KfW forecasts economic growth of 1.0%, in its risk scenario a recession – is reflected by the indicator in the forecast starting in the first quarter of 2012: new lending business will lose momentum; in the course of the year, the growth rate is likely to become negative.
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