Euro zone money supply expands in February, but credit to private sector falls

Nathan Andrada – Fourth Estate Cooperative Contributor

Brussels, Belgium (4E) – Money supply growth in the euro area rose in February as predicted by economists, while lending to the private sector continued its downward trend, according to official data released Thursday.

The annual growth rate of M3, which is the broad monetary aggregate, increased 1.3 percent in February from a year ago, faster than January’s 1.2 percent gain, according to the European Central Bank. The rate is in line with economists’ expectations.

Credit extended to the private sector slid 2.3 percent from a year ago. Lending fell 2.2 percent compared with a 2.3 percent decline in the prior month.

Credit offered to households declined 0.1 percent last month, while loans for house purchases increased 0.6 percent.

Economists say that with the euro zone economy stabilizing as the year progresses and with business confidence improving, demand for credit from companies will gradually rise over the coming months.

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