Euro area’s M3 money supply growth is likely to have accelerated to 5.3% y/y last month, according to Societe Generale. In February, the currency bloc’s M3 money supply had grown 5% y/y, where credit to governments from MFIs accounted 3.7pp. The contribution from credit to governments from MFIs is expected to increase more, noted Societe Generale.
Since the beginning of April 2016, monthly purchases in private and public sector securities rose from EUR 60 billion to EUR 80 billion. M3 growth is expected to accelerate more to the higher end of the 5%-5.5% range and possibly beyond that, supported by the expansion of QE program, said Societe Generale.
In February, credit to the private sector’s recovery continued to be sluggish. It quickened to 1.2% y/y from 0.9% y/y; however, there are encouraging signs. Credit growth to the private sector is likely to surpass 2% by late 2016, according to Societe Generale.
