Thursday, March 27, 2025 1:39 PM EDT

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Bank lending growth in the eurozone increased again in February for both businesses and households. Growth rose from 1.3% in January to 1.5% in February for households and from 2% to 2.2% for businesses. This is historically still quite weak as it remains below the growth rates seen between 2017-19, but those growth rates could possibly be reached over the course of the year if financial conditions ease.
This shows that the impact of ECB easing continues to have the desired effect on the economy. With lending growth accelerating out of stagnation, this represents a careful improvement of monetary conditions. Given the pace, though, it is also clear that the ECB is still not stimulating the economy.
The modest pace of bank lending suggests that only a small acceleration of private investment can be expected for 2025. At the same time, massive public investment plans on defence and German infrastructure are being floated, which can improve investment for the medium term. So, monetary transmission becomes less relevant for investment if sizable fiscal support does come through.
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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...
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