According to the report from the European Central Bank (ECB), in July, the M3 monetary aggregate rose by 2.3% per year after a similar increase in June (revised from 2.2%). Economists had expected growth to accelerate to 2.7% per annum. It was the eighth increase in a row and the strongest growth since April 2023.
Meanwhile, the narrower M1 aggregate, which includes money in circulation and overnight deposits, fell by 3.1% per annum, slowing compared to June (-3.4%). The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 11.4% from 12.8% in June. The annual growth rate of marketable instruments (M3-M2) increased to 21.0% from 18.7% in July.
Looking at the components' contributions to the annual growth rate of M3, the M1 contributed -2.1% (compared to -2.3% in June), short-term deposits other than overnight deposits (M2-M1) contributed 3.2% (compared to 3.5% in June) and marketable instruments (M3-M2) contributed 1.2% (compared to 1.1% in June).
The data also showed that the private loans rose by 0.5% per year after an increase of 0.3% in June. Economists also expected an increase of 0.5% per annum. The latest increase was the strongest since December 2023. Lending to companies grew by 0.6% per year, slowing down compared to June (+0.7%).