Monetary Developments In The Euro Area: July 2012

The annual growth rate of the broad monetary aggregate M3 increased to 3.8% in July 2012, from 3.2% in June 2012.[1] The three-month average of the annual growth rates of M3 in the period from May 2012 to July 2012 increased to 3.4%, from 3.0% in the period from April 2012 to June 2012.

M3 components

Regarding the main components of M3, the annual growth rate of M1 increased to 4.5% in July 2012, from 3.5% in June. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 2.2% in July, from 2.4% in the previous month. The annual growth rate of marketable instruments (M3-M2) increased to 6.4% in July, from 5.0% in June. Among the deposits included in M3, the annual growth rate of deposits placed by households increased to 2.7% in July, from 2.5% in the previous month, while the annual growth rate of deposits placed by non-financial corporations stood at -0.2% in July, compared with -0.3% in the previous month. Finally, the annual growth rate of deposits placed by non-monetary financial intermediaries (excluding insurance corporations and pension funds) increased to 4.8% in July, from 3.3% 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 1.2% in July 2012, from 1.4% in the previous month. The annual growth rate of credit extended to general government stood at 9.4% in July, unchanged from the previous month, while the annual growth rate of credit extended to the private sector was more negative at -0.6% in July, from -0.4% in the previous month. Among the components of credit to the private sector, the annual growth rate of loans increased to 0.1% in July, from -0.2% in the previous month (adjusted for loan sales and securitisation2, the rate increased to 0.5%, from 0.3% in the previous month). The annual growth rate of loans to households stood at 0.3% in July, unchanged from the previous month (adjusted for loan sales and securitisation, the rate stood at 1.1%, unchanged from the previous month). The annual growth rate of lending for house purchase, the most important component of household loans, stood at 0.8% in July, unchanged from the previous month. The annual growth rate of loans to non-financial corporations was less negative at -0.4% in July, from -0.6% in the previous month (adjusted for loan sales and securitisation, the rate was less negative at -0.2% in July, from -0.4% in the previous month). Finally, the annual growth rate of loans to non-monetary financial intermediaries (excluding insurance corporations and pension funds) increased to 1.8% in July, from 0.2% in the previous month.

Other counterparts

Over the 12 months up to July 2012, the net external asset position of the euro area MFI sector decreased by €37 billion, compared with a decrease of €70 billion over the 12 months up to June. The annual growth rate of longer-term financial liabilities of the MFI sector was more negative at -1.3% in July, from -0.5% in June.

[1] The annual growth rates presented in this press release refer to aggregates adjusted for seasonal and end-of-month calendar effects.