Growth in eurozone private sector loans slows: ECB

[FRANKFURT] Growth of loans to the private sector in the euro area slowed in December, European Central Bank data showed on Friday.

The statistics are a key indicator of economic health for the ECB, as borrowing is a main financing source for corporate investment which in turn should boost the eurozone's currently weak economy.

In December, approved loans rose 0.6 per cent from a year ago, much slower than growth of 1.2 per cent in November, an ECB statement said.

When certain strictly financial transactions are stripped out from the loans data, the trend remained the same - with credit accorded to households and companies up just 0.4 per cent in December, compared with 0.9 per cent in November.

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

The ECB already extended that programme by a further six months in a bid to drive eurozone inflation higher.

But earlier this month, ECB chief Mario Draghi hinted that more stimulus measures could be on the cards in March if eurozone inflation does not pick up soon.

Turning to growth in the overall money supply, known as M3, it slowed to 4.7 per cent in December from 5.0 per cent in November.

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

AFP