2021.02.2508:39:00UTC+00Eurozone Money Supply Rises; Private Sector Credit Growth Slows

Eurozone money supply growth improved in January, while growth in credit to the private sector eased, data from the European Central Bank showed on Thursday.

The M3 monetary aggregate grew 12.5 percent annually, as expected, after rising 12.4 percent in December. In three months to January, M3 expanded 12 percent on average.

At the same time, the narrow measure M1 growth accelerated to 16.4 percent from 15.6 percent a month ago.

Data showed that credit to euro area residents rose at a steady pace of 9.6 percent and that to general government advanced 22.9 percent from the last year. Growth of credit to the private sector eased to 5.1 percent from 5.4 percent a month ago.

Adjusted loans to the private sector grew at a slower pace of 4.5 percent, following a 4.7 percent rise in the previous month. Adjusted loans to households also climbed at a slightly slower rate of 3 percent.

The annual growth rate of adjusted loans to non-financial corporations came in at 7.0 percent in January, versus 7.1 percent in December.

Decreasing bank lending growth indicates that the outlook for investment remains subdued amid high economic uncertainty at the start of the year, Bert Colijn, an ING economist, said.

The eurozone investment recovery continues to face headwinds in the short-run, the economist noted.