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ECB-EU-EUROZONE-CREDIT
Eurozone loan growth pauses in July: ECB
FRANKFURT AM MAIN, Aug 28, 2018 (BSS/AFP) – The pace of lending to
eurozone firms and households paused in July, official data showed Tuesday,
complicating the picture for the European Central Bank as it prepares to
scale back its easy money policies.
Credit to non-financial firms grew 3.0 percent year-on-year last month,
adjusting for some purely financial transactions, the same rate as in June.
Growth in borrowing to households was also flat month-on-month at 4.1
percent, the ECB said in a statement.
The pace of loan growth is a key indicator of financial health for the ECB
as it prepares to withdraw its massive support for the eurozone economy.
Overall, credit to the private sector in the 19-nation single currency area
increased 3.4 percent in July, a slowdown of 0.1 percent from June as
financial firms like pension funds and insurance companies borrowed less.
Aiming to boost growth and stoke inflation to its target of just below 2.0
percent, the ECB has set interest rates at historic lows and buys 30 billion
euros ($35 billion) of government and corporate bonds per month.
The measures are designed to pump cash through the financial system and
into the real economy, where it can power investments, hiring and consumer
spending.
The ECB has said that it will reduce purchases to 15 billion euros per
month from October before ending them in December, saying the move is
justified as inflation is on a solid path towards its goal.
A quarterly survey by the Frankfurt institution last month showed that
between April and June, demand for credit remained strong among firms and
households and banks were loosening conditions for issuing and repayment of
loans.
BSS/AFP/MR/ 1450 hrs