Eurozone: Lending growth weakens in September – ING

Bert Colijn, senior economist at ING, points out that Eurozone’s slowdown in M3 money supply from 5.8 to 5.5% year-on-year in September is not necessarily very alarming.

Key Quotes

“The indicator had seen strong growth over recent months, which was also found in the narrow money aggregate M1, a clear green shoot for a growth pickup in the middle of next year. A one-month blip is not necessarily alarming, but in the light of an already weak economy should be treated with caution.”

“More concerning is the weakness in private sector lending growth, which declined slightly from 3.8 to 3.7% in September mainly due to a decline in the growth rate of non-financial corporate lending. This drop from 4.3 to 3.7% represents a weakening of the credit impulse and could reflect reluctance in borrowing among businesses as concerns about the economy become widespread.”