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Monetary Developments in the Euro Area: July 2011
added: 2011-08-29

The annual growth rate of the broad monetary aggregate M3 stood at 2.0% in July 2011, compared with 1.9% in June 2011. The three-month average of the annual growth rates of M3 in the period from May 2011 to July 2011 stood at 2.1%, compared with 2.0% in the period from April 2011 to June 2011.

M3 components

Regarding the main components of M3, the annual growth rate of M1 decreased to 0.9% in July 2011, from 1.2% in June. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) stood at 3.7% in July, unchanged from the previous month. The annual growth rate of marketable instruments (M3-M2) increased to 0.9% in July, from -0.9% in June. Among the deposits included in M3, the annual growth rate of deposits placed by households stood at 2.1% in July, unchanged from the previous month, while the annual growth rate of deposits placed by non-financial corporations increased to 4.6% in July, from 4.3% in the previous month. Finally, the annual growth rate of deposits placed by non-monetary financial intermediaries (excluding insurance corporations and pension funds) decreased to 5.3% in July, from 6.2% in the previous month.

Counterparts to M3: credit and loans

Turning to the main counterparts of M3 on the asset side of the consolidated balance sheet of Monetary Financial Institutions (MFIs), the annual growth rate of total credit granted to euro area residents decreased to 2.5% in July 2011, from 2.7% in the previous month. The annual growth rate of credit extended to general government increased to 4.9% in July, from 4.7% in June, while the annual growth rate of credit extended to the private sector decreased to 1.9% in July, from 2.2% in the previous month. Among the components of credit to the private sector, the annual growth rate of loans stood at 2.4% in July, compared with 2.5% in the previous month (adjusted for loan sales and securitisation, the rate decreased to 2.6%, from 2.8% in the previous month). The annual growth rate of loans to households decreased to 3.0% in July, from 3.2% in June (adjusted for loan sales and securitisation, the rate stood at 2.8%, compared with 2.9% in June). The annual growth rate of loans to non-financial corporations stood at 1.6% in July, compared with 1.5% in June (adjusted for loan sales and securitisation, the rate stood at 2.3% in July, compared with 2.4% in the previous month). The annual growth rate of lending for house purchase, the most important component of household loans, decreased to 3.9% in July, from 4.3% in the previous month. Finally, the annual growth rate of loans to non-monetary financial intermediaries (excluding insurance corporations and pension funds) stood at 3.5% in July, unchanged from the previous month.

Other counterparts

Over the 12 months up to July 2011, the net external asset position of the euro area MFI sector increased by €167 billion, compared with an increase of €137 billion over the 12 months up to June. The annual growth rate of longer-term financial liabilities of the MFI sector decreased to 4.6% in July, from 4.9% in June.


Source: ECB

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