According to the report from the European Central Bank (ECB), in May, the M3 monetary aggregate rose by 1.6% per year, accelerating compared to April (+1.3%), and exceeding economists' forecasts (+1.5%). It was the sixth 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 4.9% per annum, slowing compared to April (-5.9%). The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 14.7% from 15.6% in April. The annual growth rate of marketable instruments (M3-M2) decreased to 17.5% from 22.6% in April.
Looking at the components' contributions to the annual growth rate of M3, the M1 contributed -3.3% (compared to -4.0% in April), short-term deposits other than overnight deposits (M2-M1) contributed 4.0% (compared to 4.1% in April) and marketable instruments (M3-M2) contributed 1.0% (compared to 1.2% in April).
The data also showed that the private loans rose by 0.3% per year, as expected, after an increase of 0.2% in April (the weakest growth since March 2015). Overall credit growth to the private sector, which includes both households and non-financial corporations, slowed to 0.8% from 0.9% in April. Lending to companies grew by 0.3% per year after a similar increase in April.