Slower growth in eurozone loans to private sector: ECB

27th October 2015, Comments 0 comments

Growth of loans to the private sector in the euro area, a gauge of economic health, appears to be losing momentum again, European Central Bank data showed on Tuesday.

After long months of contraction, the volume of loans to private businesses and households has returned to growth.

But the rate of that expansion slowed last month, with the volume of loans increasing by just 0.6 percent in September compared with the same month in 2014, the ECB said in a statement.

That is slower than the previous month when private sector loans had increased by 1.0 percent.

The long and deep financial crisis in the 19 countries that share the euro has squeezed lending, thus dampening economic activity.

The ECB has launched a raft of different policy measures to get credit flowing again, most significantly a massive programme to buy more than one trillion euros ($1.1 trillion) worth of public sector bonds to pump liquidity into the system.

But last week, ECB chief Mario Draghi said the central bank would re-examine its monetary policy stance in December to determine whether additional monetary stimulus was needed to push up the chronically low rate of inflation in the euro area.

The overall eurozone money supply grew 4.9 percent in September from a year earlier, unchanged from the rate in August, the ECB data showed on Tuesday.

The ECB regards M3 money supply as a barometer for future inflation.

© 2015 AFP

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