Eurozone loan growth picks up in April

European Central Bank (ECB) headquarters in Frankfurt, Germany, July 29, 2016. — Reuters pic
European Central Bank (ECB) headquarters in Frankfurt, Germany, July 29, 2016. — Reuters pic

FRANKFURT, May 28 — Growth in lending to firms and households in the eurozone picked up in April, official data showed today, in a glimmer of encouragement for a bloc still stalked by gloom.

The pace of growth in credit to the private sector reached 3.4 per cent year-on-year last month, the European Central Bank said in figures adjusted for some purely financial transactions.

That was 0.2 percentage points higher than in March.

Looking in more detail, loan growth to households ticked up to 3.4 per cent, while expansion in credit to non-financial firms added 0.3 points, reaching 3.9 per cent.

Lending to ordinary people and companies is closely watched as an indicator of economic health.

The ECB has for years aimed to boost credit with historic low interest rates and trillion-euro interventions on financial markets.

By keeping loans flowing freely, it hopes to stimulate growth and push up inflation towards its price stability target of just below two percent.

While the threat of deflation has been largely banished, trade conflicts, the threat of a chaotic Brexit and weakness in emerging markets have braked eurozone expansion since late last year.

The single currency area’s gross domestic product added 0.4 per cent in the first quarter, while official forecasts and forward-looking surveys point to sluggish performance over the rest of 2019.

ECB policymakers have vowed to juice lending again with a new series of low-cost loans to banks from September. — AFP

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