Euroarea money supply growth seems to have accelerated in December

Euro area’s money supply growth is expected to have accelerated in December. According to a Societe Generale research report, the M3 growth is likely to have accelerated a bit in December to 5.1 percent year-on-year. The bank lending survey has not indicated towards any considerable change in the near term and the M3 growth is expected to linger around 5 percent in the months ahead, noted Societe Generale.

The ECB’s bank lending survey for January indicated some slight tightening in credit conditions and no considerable change in credit demand. The survey took place between the 7th and 27th of December 2016. Based on the results, loan growth to the private sector is likely to remain around the current rates of 2.1 percent.

In all, the fragmentation in the actual flow of loans has dropped considerably in October and November. If this rebound quickens, it might result in positive surprise on credit growth, added Societe Generale.