Loan growth in eurozone private sector picks up: ECB

[FRANKFURT] Growth of loans to the private sector in the euro area edged up slightly in May, European Central Bank data showed on Monday.

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

In May, approved loans rose 1.1 per cent from a year ago, slightly faster than growth of 1.0 per cent in April, an ECB statement said.

When certain strictly financial transactions are stripped out, the growth in loans also increased, with credit accorded to households and companies up 1.0 per cent in May after a rise of 0.8 per cent in April.

The ECB has launched a raft of policy measures to get credit flowing, most significantly a massive programme to buy public sector bonds to pump liquidity into the system.

The ECB recently beefed up that programme and also launched a new scheme of ultra-cheap loans to banks on condition they lend them on to households and businesses.

Growth in the overall money supply, known as M3, stood at 4.9 per cent in May, faster than the 4.6 per cent recorded in April, the ECB also said Wednesday.

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

AFP