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(CEP News) - Money supply growth in the euro zone declined in July, but not as much as economists had been expecting, according to a report released by the European Central Bank on Thursday, which saw a 9.3% annual growth rate in M3 money supply compared to June's 9.5% rate of expansion.
Economists had projected a decline to 9.0%. The annual three-month average for M3 fell to a 9.6% growth rate from 9.9% in June, despite forecasts for a 9.5% level. The ECB went on to note that the growth of loans to the private sector fell to 9.4% in July compared to 9.9% in June, while loans to non-financial corporations declined to 13.2% from 13.6% previously. Lending to housing declined to 4.3% from 4.4% in June, and the annual rate of growth to consumer credit fell to 4.4% in July compared to 4.9% in June. Meanwhile, lending to households also declined to 2.7% from 2.9% previously. "While the ECB still describes the rate of broad money growth as vigorous, it appears to be taking some encouragement from the fact that the annual growth rate is moderating," reads a research note from Capital Economics ahead of the ECB's release. "However, even if annual M3 growth drops to 9.0% in July, in line with our expectations, it will probably take a few more months of further falls before the ECB's concerns about the inflation implications of the strength of the money supply are completely expunged." By Erik Kevin Franco,
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, edited by Nancy Girgis,
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