A further slowdown in lending to the private sector in May, already contracting in the peripheral countries. The ECB published yesterday the data on lending to the private sector in the Eurozone, where it confirms the progressive slowdown in bank lending to +2.7% year.on.year in May vs. +3.5% in April and a peak of +6.5% in September last year, so that it is already slightly below its pre-pandemic levels of +3% (2018-19 average).
This slower growth affects both corporate lending (-0.6pp m/m to +4% year-on-year in May) and household lending (-1pp m/m to +1.7% year-on-year). By countries, the strongest growth in bank lending continued to be in the core countries (+4.6% in Germany and +3.5% in France), in contrast to declines of -0.9% in Italian lending and -1.8% in Spain.
Similarly, lending to companies is also significantly higher in Germany (+7.7%) and France (+6.2%) than in Italy (-2.3%) or Spain (-1.4%). The exception to this duality between core vs. peripheral countries is found in consumer credit, where the lowest growth rate is in German credit: +1.1%, in contrast to +4.6% in Italian credit, +3.3% in Spanish credit and +2.8% at European level.
