Euro-Zone Slowng Credit Growth and Money Supply

By: Victoria_Marklew

Today's ECB data on credit and money supply showed that the pace of loan growth to the private sector is easing, coming in at 9.8% on the year in June, versus 10.5% in May.

Chart 1

In addition, the headline rate of growth in M3 money supply fell to an annual 9.5% in June from 10.0% the month before.

Chart 2

While the pace of credit and monetary expansion is still high for a slowing economy, the fact that they are easing all-but guarantees that the European Central Bank (ECB) won't be making any more rate hikes in the second half of this year.

By Victoria Marklew
The Northern Trust Company
Economic Research Department - Daily Global Commentary

Victoria Marklew is Vice President and International Economist at The Northern Trust Company, Chicago. She joined the Bank in 1991, and works in the Economic Research Department, where she assesses country lending and investment risk, focusing in particular on Asia. Ms. Marklew has a B.A. degree from the University of London, an M.Sc. from the London School of Economics, and a Ph.D. in Political Economy from the University of Pennsylvania. She is the author of Cash, Crisis, and Corporate Governance: The Role of National Financial Systems in Industrial Restructuring (University of Michigan Press, 1995).

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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