FRANKFURT AM MAIN - The euro area economy is showing signs of strengthening on the monetary front, according to the latest data from the European Central Bank. In July 2026, the M3 monetary aggregate accelerated to 3.4%, while the growth in loans to the private sector recorded a further increase. In particular, financing to non-financial corporations showed stronger momentum. By contrast, growth in the M1 monetary aggregate slowed, falling to 3.1%.
The annual growth rate of the broad monetary aggregate M3 stood at 3.4% in July 2026
Monetary developments in the euro area: July 2026, data from the European Central Bank. The annual growth rate of the broad monetary aggregate M3 stood at 3.4% in July 2026, compared with 3.3% in June 2026. The annual growth rate of the narrower monetary aggregate M1, which comprises currency in circulation and overnight deposits, decreased to 3.1% in July, from 3.5% in June (revised from the previous 3.4%). The annual growth rate of loans to households, adjusted for reclassifications, stood at 3.1% in July, compared with 3.0% in June. The annual growth rate of loans to non-financial corporations, adjusted for reclassifications, increased to 4.4% in July, from 4.0% in June. The annual growth rate of the broad monetary aggregate M3 stood at 3.4% in July 2026, compared with 3.3% in June, averaging 3.2% over the three months to July. The components of M3 showed the following developments.
The annual growth rate of household deposits stood at 2.6% in July 2026
The annual growth rate of the narrower monetary aggregate M1, which comprises currency in circulation and overnight deposits, decreased to 3.1% in July, from 3.5% in June. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) increased to 3.8% in July, from 2.8% in June. The annual growth rate of marketable instruments (M3-M2) decreased to 4.2% in July, from 4.4% in June. As regards the contribution of the individual components to the annual growth rate of M3, the narrower monetary aggregate M1 contributed 2.0 percentage points (down from 2.2 percentage points in June); short-term deposits other than overnight deposits (M2-M1) contributed 1.1 percentage points (up from 0.8 percentage points in June); marketable instruments (M3-M2) contributed 0.3 percentage points, unchanged from the previous month. As regards the sectors holding the deposits included in M3, the annual growth rate of household deposits stood at 2.6% in July, compared with 2.7% in June, while the annual growth rate of deposits held by non-financial corporations stood at 5.3% in July, unchanged from the previous month.
The reflection of changes in the items on the consolidated balance sheet of monetary financial institutions
Finally, the annual growth rate of deposits held by investment funds other than money market funds increased to 1.8% in July, from 1.6% in June. The annual growth rate of M3 in July 2026, as a reflection of changes in the items on the consolidated balance sheet of monetary financial institutions (MFIs) other than M3 (the so-called counterparts of M3), can be broken down as follows: claims on the private sector contributed 3.3 percentage points (up from 3.0 percentage points in June); net external assets contributed 2.2 percentage points (down from 2.3 percentage points); claims on general government contributed -0.2 percentage points (compared with +0.1 percentage points in June); longer-term liabilities contributed -1.7 percentage points (compared with -1.6 percentage points); and the remaining counterparts of M3 contributed -0.2 percentage points (compared with -0.5 percentage points in June).
The annual growth rate of loans to the private sector increased to 4.1% in July 2026
The annual growth rate of total claims on euro area residents stood at 2.4% in July 2026, compared with 2.3% in the previous month. The annual growth rate of claims on general government decreased to -0.5% in July, from 0.3% in June, while the annual growth rate of claims on the private sector increased to 3.5% in July, from 3.2% in June. The annual growth rate of loans to the private sector, adjusted for reclassifications (i.e. adjusted for loan transfers and notional cash pooling), increased to 4.1% in July, from 3.8% in June. Within the non-financial private sector, the annual growth rate of loans to households, adjusted for reclassifications, stood at 3.1% in July, compared with 3.0% in June, while the annual growth rate of loans to non-financial corporations, adjusted for reclassifications, increased to 4.4% in July, from 4.0% in June.
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