ATHENS, May 17 (Xinhua) -- Non-performing loans (NPLs) in Greece's banking system had been reduced by 82.8 pct in the period 2016-2021, but the outlook for the future is cloudy due to the new challenges, local officials told an online economic forum here on Tuesday.
NPLs at the end of December 2021 amounted to 18.4 billion euros (19.4 billion U.S. dollars), down by 90.3 billion euros compared to March 2016, when they had peaked during the acute debt crisis Greece went through (2010-2018), said Christina Papaconstantinou, Bank of Greece (BoG) Deputy Governor.
Their percentage in relation to the total amount of loans in 2021 was the lowest in a decade (about 13 pct), but still far behind the 2 percent EU average last year, she added in a statement.
The inflationary pressures on the international economy from the current energy crisis and the Russia-Ukraine conflict challenge the recovery achieved following the initial pandemic shock, causing concern to governments and central banks, experts noted.
"We cannot rule out a new wave of NPLs, especially if the geopolitical crisis we are going through at the moment will continue for a long period or will further escalate," Papaconstantinou said regarding Greece.
The NPLs are a burden on debt-ridden households and businesses, amid rising energy costs and falling disposable income, which may affect the quality of banks' loans portfolios, she said.
Actions need to be taken to ensure that the banking system will continue contributing to the growth of the Greek economy, she stressed.
The stock of NPLs remains the single biggest challenge for the Greek banking sector, according to the latest BoG's Financial Stability Report released last week.
"The challenges are great, the uncertainties significant... The Greek economy has solid foundation, stability and prospects," Finance Minister Christos Staikouras told the forum, outlining the policies implemented to address the NPLs issue in recent years and the steps forward to tackle the new challenges.
A series of reforms and state support programs have produced positive results to date and the government will continue implementing a similar strategy, the minister said. (1 euro = 1.05 U.S. dollars)