Daily Times

FRANKFURT: Growth in borrowing by households in the eurozone hit an eight-year high in May, European Central Bank data showed Wednesday, as policymakers talked up new confidence in the single currency area.

Loans to households grew 2.6 percent last month, the ECB data showed, up from 2.4 percent in April and the fastest rate of growth since March 2009.

Growth in borrowing by businesses held steady at 2.4 percent in May and overall lending to the private sector also saw stable growth of 2.6 percent.

In recent public appearances, ECB policymakers have argued that their steps to ease access to credit for businesses and households have worked, offering vital stimulus to an economy shocked by the financial crisis.

The ECB offered cheap loans to banks, slashed interest rates to historic lows and continues to pump tens of billions of euros per month into the financial system through bond-buying.

By making access to cash easier, the central bank aims to stimulate growth and push inflation towards its target of just below 2.0 percent.

The ECB boosted growth expectations for the coming years in new forecasts published earlier this month, but predicted that inflation will continue to fall short of its goal.

ECB president Mario Draghi on Tuesday hailed “newfound confidence” in the euro area as the economy picks up and political risks fade.

Published in Daily Times, June 29th, 2017.