ZCZC
BCN-44
ECB-EU-EUROZONE-BANKING
Loan growth to eurozone firms picks up
FRANKFURT AM MAIN, June 27, 2018 (BSS/AFP) – Growth in lending to
companies in the eurozone picked up in May, official data showed Wednesday, a
bright spot in the data as fears of economic slowdown intensify.
Adjusted for some purely financial transactions, the pace of growth in
credit to firms picked up to 3.6 percent year-on-year last month, up from 3.3
percent in April, the European Central Bank said in a data release.
Growth in lending to households was flat at 2.9 percent, also in adjusted
figures.
That meant firms accounted for most of the increase in the pace of credit
growth last month, from 3.0 to 3.3 percent.
Economists watch loan growth closely, as more cash flowing into the
economy points to an increase in activity.
ECB policymakers are particularly alert to new data following their
decision this month to dismantle a key pillar of their support to the
eurozone by the end of the year.
Aiming to boost growth and stoke inflation to the target of just below 2.0
percent, the Frankfurt institution has set interest rates at historic lows
and buys 30 billion euros ($35 billion) of government and corporate bonds per
month.
Both policies are designed to pump cash through the financial system and
into the real economy, where it can power investments, hiring and consumer
spending.
But from October, the ECB will reduce purchases to 15 billion euros per
month before ending them completely in December, saying the move is justified
as inflation is on a solid path towards its goal.
Keenly aware that growth slowed in early 2018 from the intense pace seen
late last year, President Mario Draghi nevertheless left the bank’s options
open to slow its exit if economic conditions worsen.
BSS/AFP/HR/42