Corporate loans are increasingly losing momentum in the Eurozone

The growth of loans granted to companies by financial institutions, especially banks, in the Euro Zone continued to lose momentum in April due to monetary tightening.

The European Central Bank (ECB) published the monthly changes in corporate and consumer loans for April.

As a result, corporate loans, which rose 5.2 percent on an annual basis in March, rose 4.6 percent last month. Consumer loans, on the other hand, rose 2.5 percent last month.

The continued loss of momentum in corporate lending was assessed as “the ECB’s 7 rate hikes since July 2022 gradually showed their effect.”

In April, the M3 money supply rose 1.9 percent annually, staying below the 2.1 percent expected by analysts. This is the lowest rate recorded since June 2014.

The slow growth of the M3 money supply is seen as an indication that the rate of increase in inflation may slow down in the future. However, the relationship between the money supply and inflation is now considered to be very complex. (AA)