LBCI

Euro zone lending growth slows again amid downturn

World

27-02-2023 | 07:51

Share

Share

Euro zone lending growth slows again amid downturn

2^min

Euro zone bank lending fell again in January while cash and liquid deposits declined for the first time ever as rapid central bank rate hikes took their toll, European Central Bank data showed on Monday.

The ECB has raised rates at a record rate, by 300 basis points since July, and promised even more action in the hope that higher borrowing costs will restrict economic activity enough to tame inflation.

Lending growth to businesses in the 20 nation currency bloc slowed for the third straight month, to 6.1 percent in January from a 6.3 percent rise a month earlier, while household credit growth slowed to 3.6 percent from 3.8 percent.

Meanwhile the ECB's M1 measure of currency in circulation plus overnight deposits, a good leading indicator of future activity, shrunk by 0.7 percent, the first ever negative reading.

"Tightening efforts are having a clear effect on money supply and private sector borrowing, which will have a dampening impact on economic growth and inflation in 2023," ING economist Bert Colijn said. "We consider the impact of the hike cycle an underappreciated downside to economic activity for this year."

The ECB's Bank Lending Survey earlier showed banks already tightened access to credit in the fourth quarter by the most since the bloc's debt crisis a decade ago and predicted even more restrictive lending policies for the three months to March.

The monthly flow of loans to companies was a mere 2 billion euros ($2.11 billion) in January but that was an improvement on the negative 25 billion euro reading in December.

Growth in the M3 measure of money circulating in the euro zone meanwhile fell to 3.5 percent from 4.1 percent, coming well below expectations for 3.9 percent in a Reuters survey.

Euro Zone

Lending

Growth

Slows

Again

Amid

Downturn

Market

European Central Bank

Inflation

Measure

Currency

Subscribe to our VOD

SUBSCRIBE

Our visitors readings

Gunfire heard, two grenades thrown in Ain al-Hilweh camp

2026-01-22

Gunfire heard, two grenades thrown in Ain al-Hilweh camp

Rubio: US satisfied with overall 'trajectory' in Syria

2026-02-15

Rubio: US satisfied with overall 'trajectory' in Syria

US begins Iran port blockade, oil prices ease on hopes for dialogue

Middle East News

2026-04-14

US begins Iran port blockade, oil prices ease on hopes for dialogue

American University in Armenia stops in-person teaching over Iran threat

2026-03-30

American University in Armenia stops in-person teaching over Iran threat

Videos

Lebanon-Israel talks: delegations arrive at US Embassy in Rome — Video

2026-08-06

Lebanon-Israel talks: delegations arrive at US Embassy in Rome — Video

Residents begin returning to Zawtar el-Gharbiyeh, southern Lebanon: Video

2026-07-24

Residents begin returning to Zawtar el-Gharbiyeh, southern Lebanon: Video

Slotkin to LBCI: Lebanese army needs resources to confront Hezbollah, $36 million request submitted for special forces

2026-07-20

Slotkin to LBCI: Lebanese army needs resources to confront Hezbollah, $36 million request submitted for special forces

Lebanon’s ambassador to Washington: trilateral framework agreement first step toward restoring sovereignty

2026-06-26

Lebanon’s ambassador to Washington: trilateral framework agreement first step toward restoring sovereignty

Rubio on Lebanon-Israel framework agreement: 'beginning of the beginning,' more work needed

2026-06-26

Rubio on Lebanon-Israel framework agreement: 'beginning of the beginning,' more work needed

Lebanon, Israel sign trilateral framework agreement after Washington talks attended by Rubio: Video

2026-06-26

Lebanon, Israel sign trilateral framework agreement after Washington talks attended by Rubio: Video

Israeli strikes renew on Choukine, Maifadoun, and Nabatieh al-Fawqa in southern Lebanon: Video

2026-06-20

Israeli strikes renew on Choukine, Maifadoun, and Nabatieh al-Fawqa in southern Lebanon: Video

Massive Israeli strikes hit South Lebanon under ceasefire conditions

2026-06-19

Massive Israeli strikes hit South Lebanon under ceasefire conditions

Trump criticizes Israel’s Lebanon campaign, says war has gone on ‘too long’ and floats Syria role in conflict

2026-06-16

Trump criticizes Israel’s Lebanon campaign, says war has gone on ‘too long’ and floats Syria role in conflict

Most read

24 hours

7 days

Month

Rain in August? Sudden weather shift surprises Lebanon: Video

1

Rain in August? Sudden weather shift surprises Lebanon: Video

Walla: Israeli military strikes Ali al-Taher heights in southern Lebanon

2

Walla: Israeli military strikes Ali al-Taher heights in southern Lebanon

Wanted for war crimes: Why was retired Syrian Gen. Adel Issa detained in Beirut?

3

Wanted for war crimes: Why was retired Syrian Gen. Adel Issa detained in Beirut?

Diplomacy vs. escalation: Southern Lebanon enters a critical new phase

4

Diplomacy vs. escalation: Southern Lebanon enters a critical new phase

Waste crisis or new tax? Lebanon’s environmental fee raises questions

5

Waste crisis or new tax? Lebanon’s environmental fee raises questions

Six killed, two injured in airstrike in southern Lebanon as displacement reported in Nabatieh

6

Six killed, two injured in airstrike in southern Lebanon as displacement reported in Nabatieh

Health Ministry: Seven killed, including three children and two women, in Israeli strike on Ansar

7

Health Ministry: Seven killed, including three children and two women, in Israeli strike on Ansar

PM Salam condemns Israeli escalation in southern Lebanon, calls for halt

8

PM Salam condemns Israeli escalation in southern Lebanon, calls for halt

Download now the LBCI mobile app

To see the latest news, the latest daily programs in Lebanon and the world

Google Play

App Store

Download now the LBCI mobile app

We use
cookies

We use cookies to make
your experience on this
website better.

Accept

Learn More