Determinants of Credits on Private Sector in CEE Countries

Gergana Mihaylova-Borisova

Economic Research Guardian, 2023, vol. 13, issue 1, 2-15

Abstract: The study determines the factors behind the bank credit dynamics in CEE countries by using the dynamic balanced econometric panel model. The following CEE countries are covered: Bulgaria, Lithuania, Romania, Czech Republic, Slovenia, Poland, Estonia, Hungary, Latvia and Slovak Republic. The period of investigation is 2008 to 2021, covering crises in the analyzed time span. The results showed that the economic development, measured by the GDP growth rate determines and affects positively the financial performance variables in particular the share of the credits to private sector in GDP in the analyzed countries. The level of non-performing loans and deposits also have effect on the bank’s performance of the covered countries. The results lead to the conclusion that measures should be taken for the real sector restructuring so that it becomes more productive, which will also contribute to a more sustainable performance of the CEE countries’ financial system.

Keywords: Private loans; Real GDP growth rate; Credit factors; CEE countries (search for similar items in EconPapers)
JEL-codes: E44 E51 G21 O52 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:13:y:2023:i:1:p:2-15

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