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Lending to euro zone households and firms grew by 0.5 percent in
May, the strongest signal yet that an ECB money-printing program
is starting to boost the economy, albeit only gradually.
The rise, although modest, is nonetheless an improvement over
the previous years where credit had been shrinking.
It was driven in large part by a 1.4 percent jump in loans for
house purchases across the 19-country euro bloc although this
picture typically varies dramatically between stronger economies
such as Germany and weaker members.
The prospects for companies seeking credit looked different
however. Lending to companies, the real engine of growth and
employment in the economy, shrank by 0.3 percent in May, the
latest in a series of monthly falls.
Sparse lending to companies has dogged the struggling euro zone
economy although ECB President Mario Draghi believes that the
bloc is turning the corner. The latest result may strengthen his
argument.
The M3 measure of money circulating throughout the 19 countries
in the euro zone grew at the slower pace of 5.0 percent in May,
the ECB said. This was lower than the 5.3 percent growth rate in
April.
Howard Archer, an economist with IHS Global Insight, described
the result as 'marginally positive news' for the ECB, pointing
to lackluster lending to business.
(Reporting By John O'Donnell; Editing by Hugh Lawson)
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