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The European Central Bank (ECB) has released data on monetary developments in the Euro area for September 2023, shedding light on key indicators and trends within the region's financial landscape.
The annual growth rate of the broad monetary aggregate M3 stood at -1.2 per cent in September 2023, showing a marginal improvement from -1.3 per cent in August. Over the three months leading to September, the average growth rate remained at -1.0 per cent. The narrower monetary aggregate M1, which includes currency in circulation and overnight deposits, recorded an annual growth rate of -9.9 per cent in September, indicating a slight improvement from -10.4 per cent in August. Short-term deposits, excluding overnight deposits (M2-M1), experienced a decline in their annual growth rate, dropping to 22.0 per cent in September, down from 23.7 per cent in August. Marketable instruments (M3-M2) also saw a decrease in their annual growth rate, falling to 19.1 per cent in September from 20.5% in August. The contributions to the annual growth rate of M3 are distributed among the components: M1 contributed -7.2 percentage points (up from -7.6 percentage points in August), short-term deposits (M2-M1) contributed 5.1 percentage points (down from 5.3 percentage points), and marketable instruments (M3-M2) contributed 0.9 percentage points (down from 1.0 percentage points). The annual growth rate of deposits placed by households witnessed a decrease to -0.2 per cent in September from 0.2 per cent in August. Deposits placed by non-financial corporations also saw a reduction, with an annual growth rate of -1.3 per cent in September, compared to -2.3 per cent in August. Deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) showed an annual growth rate of -16.2 per cent in September, an improvement from -18.8 per cent in August. The components of the broad monetary aggregate M3 can be further broken down- Net external assets contributed 2.1 percentage points (up from 1.3 percentage points in August). Credit to the private sector contributed 0.2 percentage points (down from 0.5 percentage points). Credit to the general government contributed -0.8 percentage points (unchanged from the previous month). Longer-term financial liabilities contributed -2.0 percentage points (down from -1.8 percentage points). The remaining counterparts of M3 contributed -0.6 percentage points (unchanged from the previous month). The annual growth rate of total credit to euro area residents registered -0.5 per cent in September 2023, compared to -0.2 per cent in the previous month. Credit to the general government held steady with an annual growth rate of -2.1 per cent in September, unchanged from the previous month. Credit to the private sector saw a decrease in its annual growth rate, falling to 0.2 per cent in September from 0.6 per cent in August. Adjusted loans to the private sector, which account for loan sales, securitization, and notional cash pooling, experienced an annual growth rate of 0.3 per cent in September, down from 0.7 per cent in August. Adjusted loans to households decreased to an annual growth rate of 0.8 per cent in September from 1.0 per cent in August, while adjusted loans to non-financial corporations dropped to 0.2 per cent in September from 0.7 per cent in August. The data illustrates the evolving monetary landscape in the euro area, reflecting economic conditions and policy measures implemented by the ECB. As the region grapples with economic challenges, these figures offer insights into the dynamics of money supply and credit within the currency bloc. (ANI)
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