Money supply growth in the euro area accelerated in December

The European Central Bank (ECB) informed that, money supply growth in the euro area accelerated in December, while adjusted loans to the private sector recorded a steady pace. Data on the development of the M3 money supply, which is a key indicator of the cash position in the economy, show that its annual growth rate increased to 12.3% in December from 11% in November. This result exceeded the estimates of analysts, who expected it to reach 11.2%. Similarly, growth in the narrower M1 aggregate, which includes currency and deposits, picked up in December, rising 15.6% after rising 14.5% a month earlier. ECB data further showed that year-on-year growth in loans to the private sector accelerated slightly to 5.3% at the end of the year, from 5% a month earlier. However, adjusted loans to the private sector maintained a stable growth rate, at 4.7%. Of this, adjusted loans to households rose by 3.1% in December, the same as in November, while in the case of firms their growth accelerated slightly to 7% from 6.9% in November. However, although the growth of loans to non-financial corporations accelerated slightly in December, their volume did not come close to the volumes recorded in March, April and May, said ING economist Bert Colijn. "The economic outlook is currently too uncertain for companies to borrow money for large investments," he added.