June 27, 2024
Components of the broad monetary aggregate M3
The annual growth rate of the broad monetary aggregate M3 climbed to 1.6% in May 2024 from 1.3% in April, with an average of 1.3% in the three months preceding May. The components of M3 underwent the following developments. The annual growth rate of the narrower aggregate M1, which includes currency in circulation and overnight deposits, was -4.9% in May, compared to -5.9% in April. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) fell to 14.7% in May, from 15.6% in April. The annual growth rate of marketable instruments (M3-M2) fell to 17.5% in May, from 22.6% in April.
Monetary aggregates
(annual growth rates)
When considering the components’ contributions to the annual growth rate of M3, the narrower aggregate M1 contributed -3.3 percentage points (up from -4.0 percentage points in April), short-term deposits other than overnight deposits (M2-M1) contributed 4.0 percentage points (down from 4.1 percentage points), and marketable instruments (M3-M2) contributed 1.0 percentage points (down from 1.2 percentage points).
Among the deposit-holding sectors in M3, the annual growth rate of deposits placed by households was 1.5% in May, up from 1.4% in April, while the annual growth rate of deposits placed by non-financial corporations grew to 1.9% in May from 0.6% in April. Finally, the annual growth rate of deposits made by investment funds other than money market funds was -2.6% in May, compared to -4.0% in April.
Counterparts of the broad monetary aggregate M3
The yearly growth rate of M3 in May 2024, as a result of changes in the items on the consolidated balance sheet of monetary financial institutions (MFIs) other than M3 (counterparts of M3), can be broken down as follows: net external assets contributed 4.0 percentage points (up from 3.7 percentage points in April), claims on the private sector contributed 0.5 percentage points (down from 0.7 percentage points), claims on general government contributed -0.6 percentage points (up from -0.7 percentage points), longer-term liabilities contributed -2.1 percentage points (up from -2.2 percentage points), and the remaining counterparts of M3 contributed -0.3 percentage points (down from -0.1 percent).
Contribution of the M3 counterparts to the annual growth rate of M3
The annual growth rate of adjusted loans to the private sector (adjusted for loan transfers and notional cash pooling) was 0.8% in May, compared to 0.9% in April. In the borrowing sector, adjusted loans to households increased by 0.3% year on year in May, up from 0.2% in April. Adjusted loans to non-financial corporations increased by 0.3% year on year in May, up from 0.2% in April.
Adjusted loans to the private sector
(annual growth rates)
(Source: European Central Bank)
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