Venezuelan bank lending slows amid inflation

CARACAS — Venezuelan economists say gains in bank lending slowed sharply in the first seven months of 2008.

A report by economic consulting firm Softline Consultores says outstanding loans grew 12.5 percent between January and July to US$53.9 billion — far less than the 35 percent growth seen in the same period last year.

The contraction follows a five-year surge in lending that flooded Venezuela with credit, fueling consumer spending and economic growth of 8.4 percent last year.

But nearly 34 percent annual inflation in Caracas has pushed the government to raise interest rates, cutting demand for loans and boosting delinquencies.

The portion of delayed or disputed loans rose by half from the same period last year to 1.85 percent in July.

Back To Top