Nov. 29 (Bloomberg) -- Hungarian banks expect household lending to improve while fewer companies qualify for corporate credit, the central bank said.
Government interest-rate subsidies on housing loans will be the main reason for an expected rise in mortgage lending, the bank said in a quarterly lending survey published today.
Hungary’s government has offered interest-rate subsidies on mortgages as it seeks to prop up the real estate market and household lending. The nation’s economy is in its second recession in four years as domestic consumption collapsed, corporate lending plunged and the euro-area crisis sapped demand for exports.
The number of companies with access to bank loans is falling as fewer businesses are able to meet tighter credit conditions, the central bank said. Banks are less willing to extend credit to companies given the “unfavorable macroeconomic environment and industry-specific problems,” the report said.
The survey was conducted before the government backtracked on its promise to cut a special bank levy in half in 2013 and announced an increase in the rate of a planned financial transaction tax to 0.2 percent.
“Demand for long-term investment loans had fallen further and the net percentage of banks reporting a decrease in demand had last been similar in 2009,” according to the survey.
Investment volumes in the economy declined an annual 5.2 percent in the first three quarters of the year, the central statistics office said earlier today.
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