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BCN-46
ECB-EU-EUROZONE-BANKING-ECONOMY
Eurozone loan growth picks up pace in August
FRANKFURT AM MAIN, Sept 27, 2018 (AFP) – Growth in lending to companies and
households in the eurozone sped up in August, European Central Bank data
showed Thursday, in an encouraging sign for the institution as it withdraws
stimulus from the economy.
The pace of credit growth to the private sector climbed to 3.4 percent
year-on-year last month, adjusting for some purely financial transactions,
0.1 percentage point faster than in July.
Looking in more detail at the data, expansion in lending to households
added 0.1 percentage points, reaching 3.1 percent, while growth in credit to
firms reached 4.2 percent, up by 0.2 points.
The faster growth in lending to the real economy comes as the ECB prepares
the final steps in its gradual withdrawal of “quantitative easing” stimulus
to the eurozone economy.
Introduced in 2015, the mass bond-buying scheme currently sees the bank buy
30 billion euros ($35.1 billion) of government and corporate bonds per month,
aiming to pump cash through the financial system to stoke lending, economic
growth and inflation.
Earlier this month, policymakers confirmed their plan to slash monthly
purchases by half from October, before winding up the programme in December.
But “this doesn’t mean our monetary policy will cease to be accommodative,”
ECB President Mario Draghi told European Parliament lawmakers last week.
The ECB will continue to influence lending conditions through its near-2.5-
trillion-euro stock of bonds, planning to reinvest the proceeds as they
mature.
And it plans to keep interest rates at their historic lows at least until
the second half of 2019.
BSS/AFP/HR/1445