According to the report from the European Central Bank (ECB), in January, the M3 monetary aggregate grew by 3.5% per annum after an increase by 4.1% per annum in December. Economists had expected an increase by 3.9% per annum. The sharp slowdown in growth was caused by higher interest rates and a looming recession. Meanwhile, the narrower M1 aggregate, which includes money in circulation and overnight deposits, fell by 0.7% per annum after declining by 0.6% per annum in December. The annual growth rate of short-term deposits, except overnight deposits (M2-M1), accelerated to 15.1% from 14.0%.
Looking at the components' contributions to the annual growth rate of M3, the M1 contributed -0.5% (compared to 0.4% in December), short-term deposits other than overnight deposits (M2-M1) contributed 3.4% (compared to 3.1% in December) and marketable instruments (M3-M2) contributed 0.6% (compared to 0.5% in December).
The data also showed that the volume of lending to the private sector increased by 3.6% per year after a 3.8% per year increase in December. Consensus estimates suggested growth by 3.9% per annum. Annual growth rate of adjusted loans to non-financial corporations decreased to 6.1% from 6.3% in December.