Monetary developments in the euro area: November 2021

29 December 2021

• Annual growth rate of broad monetary aggregate M3 decreased to 7.3% in November 2021 from 7.7% in October
• Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, decreased to 9.9% in November from 10.7% in October
• Annual growth rate of adjusted loans to households stood at 4.2% in November, compared with 4.1% in October
• Annual growth rate of adjusted loans to non-financial corporations increased to 2.9% in November from 2.5% in October

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 decreased to 7.3% in November 2021 from 7.7% in October, averaging 7.5% in the three months up to November. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, decreased to 9.9% in November from 10.7% in October. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was ‑1.4% in November, compared with -1.7% in October. The annual growth rate of marketable instruments (M3-M2) increased to 11.6% in November from 11.2% in October.

Chart 1

Monetary aggregates

(annual growth rates)

Looking at the components' contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 7.0 percentage points (down from 7.6 percentage points in October), short-term deposits other than overnight deposits (M2-M1) contributed -0.3 percentage point (up from -0.4 percentage point) and marketable instruments (M3-M2) contributed 0.6 percentage point (as in the previous month).

From the perspective of the holding sectors of deposits in M3, the annual growth rate of deposits placed by households decreased to 6.0% in November from 6.5% in October, while the annual growth rate of deposits placed by non-financial corporations increased to 7.9% in November from 7.4% in October. Finally, the annual growth rate of deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) decreased to 14.9% in November from 18.2% in October.

Counterparts of the broad monetary aggregate M3

As a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), the annual growth rate of M3 in November 2021 can be broken down as follows: credit to general government contributed 4.4 percentage points (up from 4.3 percentage points in October), credit to the private sector contributed 3.8 percentage points (up from 3.7 percentage points), longer-term financial liabilities contributed 0.2 percentage point (up from 0.1 percentage point), net external assets contributed -0.9 percentage point (down from -0.8 percentage point), and the remaining counterparts of M3 contributed -0.2 percentage point (down from 0.4 percentage point).

Chart 2

Contribution of the M3 counterparts to the annual growth rate of M3

(percentage points)

Credit to euro area residents

As regards the dynamics of credit, the annual growth rate of total credit to euro area residents stood at 5.8% in November 2021, compared with 5.7% in the previous month. The annual growth rate of credit to general government increased to 10.8% in November from 10.5% in October, while the annual growth rate of credit to the private sector stood at 3.8% in November, compared with 3.7% in October.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan sales, securitisation and notional cash pooling) increased to 3.7% in November from 3.4% in October. Among the borrowing sectors, the annual growth rate of adjusted loans to households stood at 4.2% in November, compared with 4.1% in October, while the annual growth rate of adjusted loans to non-financial corporations increased to 2.9% in November from 2.5% in October.

Chart 3

Adjusted loans to the private sector

(annual growth rates)

Notes:

• Data in this press release are adjusted for seasonal and end-of-month calendar effects, unless stated otherwise.
• "Private sector" refers to euro area non-MFIs excluding general government.
• Hyperlinks in the main body of the press release and in annex tables lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.