Eurozone: recovery in private-sector lending continues

CHART OF THE WEEK

January’s data confirm a recovery in lending to the private sector. €41 billion in new loans were extended to businesses and households, which is slightly ahead of October 2017 and marks the highest level since 2008. Annual growth in private-sector lending has reached 3.3%, driven equally by household and business demand.

private sector lending issue

 

OUR ANALYSIS

The improving lending picture has been broad-based across the Eurozone. Only Cyprus and Greece have seen their total outstanding loans contract by over 1% and the pace of credit contraction in Spain has slowed significantly following a drop of over 30% in bank lending. Germany and France are still the main drivers behind the improvement.

The upward trend can be expected to continue, as January’s survey indicates that appetite for credit is increasing and that banks are relaxing lending terms.

These are factors likely to underpin recovery in the Eurozone.

 

 

The opinion expressed above is dated 07 March 2018 and is liable to change.

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Julien-Pierre Nouen

Directeur des études économiques et de la gestion diversifiée