Bert Colijn, senior economist at ING, notes that Eurozone’s loan growth to both households and non-financial corporates remained stable in June at 3.3% YoY and 3.8% respectively.
Key Quotes
“As increasing credit growth provides an impulse to GDP, acceleration would be needed for lending to provide a positive contribution to the growth recovery. In fact, the credit impulse for non-financial corporates is now negative, which means an acceleration in investment is not on the cards despite favourable financial conditions.”
“The credit impulse to households remains stable, mainly thanks to increasing credit for consumption, with credit for house purchases plateauing for the moment.”
“The chances of improvement are small, as yesterday’s release of the Bank Lending Survey indicated. Credit conditions in the eurozone have actually tightened in the second quarter, which corresponds with the moderate lending growth.”
“For the third quarter, expectations are that credit standards will remain unchanged, which will not help improve the weak credit impulse already seen in Q2.”
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