Evidence pointing in this direction comes from surveys of banks and businesses alike. Our estimates indicate that the deterioration in lending conditions, considering both the rise in loan rates and the diminished availability of credit, cut 1 percentage point from GDP growth in 2012. The main obstacle to loan supply is the increase in credit risk as the recession drags on.
In the first quarter of 2013 the annual default rate rose to 2.8 per cent for total lending and to 4.5 per cent for lending to businesses. According to the leading indicators, the flow of bad debts will remain high for the rest of the year.