The growth of loans granted by banks in the euro zone to companies increased considerably in August. Loans to industrial and commercial companies, adjusted for certain strictly financial operations, rose 8.7% year-on-year, the fifth consecutive increase and the highest score since January 2009 during the financial crisis, according to a press release from the European Central Bank. (ECB).
In detail, the growth of loans with a duration of less than one year reached 18.7%, unprecedented since the entry of the euro. Loans to companies with a term of between one and five years also increased notably, by 9.8%.
Despite the rate hike initiated this summer by the ECB, companies are increasingly knocking on banks’ doors to finance their operating costs, which have been increased by the rise in energy and raw material prices .
Unchanged growth for loans to households
For their part, loans granted to families, including those for consumption and housing, maintained a growth rate of 4.5% without changes in August. Overall, adjusted lending to the private sector rose 6.7%, more than double the score recorded a year ago.
The growth of the M3 money supply, of 6.1%, marks a rebound in a phase of decline that began after the peak at the beginning of 2021 (+12.5%) while public aid linked to the effects of the Covid-19 pandemic 19 are less in demand. The ECB uses the aggregate M3 as a leading indicator of inflation, including cash in circulation, loans for more than two years, and deposits from households and businesses.
Despite a slower pace of money supply creation, inflation reached an all-time high of 9.1% in the euro area in August, driven by soaring energy and commodity prices against a backdrop of Russian invasion war in Ukraine. Determined to bring the aggregate back to 2%, the ECB decided to raise its reference rates, 0.50 points in July and 0.75 points in September – unheard of in the eurozone – clearly suggesting further increases will follow. , although this should weigh on the evolution of the economy.
Source: BFM TV
