General view of the exterior of the European Central Bank (ECB) headquarters building in Frankfurt. — Reuters pic
FRANKFURT, Oct 28 — The pace of growth in lending to eurozone companies slowed in September, ECB data showed today, bolstering outgoing president Mario Draghi’s message that more stimulus was warranted to confront an economic slowdown.
Loan growth to non-financial firms shed 0.6 percentage points compared with August, to 3.7 per cent year-on-year, the European Central Bank said in figures adjusted for some purely financial transactions.
Credit to households expanded by 3.4 per cent, the same pace as the two previous months.
Overall, private sector credit growth slowed from 3.8 to 3.7 per cent.
The monthly data is closely watched to gauge the effectiveness of the ECB’s measures to encourage lending and investment in the single currency bloc in a bid to drive up economic growth and inflation.
Draghi, after chairing his final meeting as ECB chief last Thursday, said a recent decision to unleash fresh stimulus in the eurozone was “justified” in the face of a weaker economy.
Last month, the Italian economist and his colleagues cut a key interest rate deeper into negative territory and loosened conditions on a new round of cheap credit to lenders.
More controversially, the ECB also relaunched corporate and government bond purchases to the tune of €20 billion (RM92.9 billion) a month, sparking rare public criticism from some council members who argued that the move was too drastic.
Draghi formally hands over to his successor, former International Monetary Fund chief Christine Lagarde, in a ceremony at the ECB later today.
Observers say her first task will be to heal the rift caused by Draghi’s last easy-money package. — AFP