Private sector loans growing in eurozone: ECB

Frankfurt (AFP) –


The volume of loans to the private sector in the euro area expanded in November, with a bigger bounce recorded than the previous month, European Central Bank data showed on Wednesday.

The statistics are a key indicator of economic health for the ECB, as borrowing is a main financing source for corporate investment which in turn should boost the eurozone's currently weak economy.

In November, approved loans rose 1.3 percent from a year ago, compared to a growth of 1.0 percent in October, an ECB statement said.

When certain strictly financial transactions are stripped out from the loans data, the trend remained the same -- with credit accorded to households and companies up 1.0 percent in November, compared with 0.8 percent in October.

The ECB has launched a raft of policy measures to get credit flowing, most significantly a massive programme to buy more than one trillion euros ($1.1 trillion) worth of public sector bonds to pump liquidity into the system.

Earlier this month, ECB chief Mario Draghi said that programme would be extended by a further six months in a bid to drive eurozone inflation higher.

However, growth in overall money supply, known as M3, slowed slightly to 5.1 percent in November from 5.3 percent in October.

The ECB regards M3 money supply as a barometer for future inflation.