The growth of loans granted by banks in the euro zone to businesses increased sharply in August as inflation increases the cost of financing, the European Central Bank (ECB) said on Tuesday.
Loans to industrial and commercial companies, adjusted for certain strictly financial transactions, rose 8.7% year on year, the fifth consecutive increase and the highest score since January 2009 during the financial crisis, according to a press release .
In this set, growth for loans with a duration of less than one year amounted to 18.7%, unheard of since the entry of the euro.
Businesses are increasingly knocking on the doors of banks to finance their operating costs, which have been made more expensive by the rise in energy and raw material prices, at a time when a significant rise in rates was initiated this summer by the ECB.
Loans to companies for a period between one and five years also increased markedly, by 9.8%.
Loans granted to households, including loans for consumption and housing, for their part kept an unchanged growth rate of 4.5% in August.
Overall, adjusted loans to the private sector climbed 6.7%, more than double the score posted a year ago.
The growth of the M3 money supply, at 6.1%, marks a rebound in a phase of decline that began following the peak at the start of 2021 (+12.5%) while public aid linked to the effects of the Covid-19 pandemic 19 are less in demand.
The M3 aggregate is used by the ECB as a leading indicator of inflation, including cash in circulation, loans over two years as well as household and corporate deposits.
Despite a slower pace of money supply creation, inflation hit a record high of 9.1% in the euro area in August, driven by soaring energy and commodity prices once morest a backdrop of Russian invasion war in Ukraine.
Determined to bring the aggregate back to 2%, the ECB decided to raise its key rates, by 0.50 points in July and 0.75 points in September – unheard of in the euro zone – clearly suggesting that other increases will follow, even if this should weigh on the evolution of the economy.
This article has been published automatically. Sources: ats / awp / afp
