Eurozone: Stronger loan growth eases slowdown concerns - ING

Eurozone’s loan growth to non-financial businesses increased from 3.3% to 3.6% year-on-year in May and is the strongest growth rate in nine years, notes Bert Colijn, Senior Economist at ING.

Key Quotes

“Even though uncertainty in the eurozone economy has not decreased in 2Q, businesses have continued to borrow more as capacity constraints are limiting output growth.”

“Growth in the broad money supply M3 bounced back as well in May, increasing from 3.8% to 4% year-on-year.”

“The more narrow indicator M1 has seen growth decline over recent months, but jumped from 7% to 7.5%.”

“For the ECB, this release must come as a relief.”

“This release suggests that business lending has not been affected all that much in May.”