Euro area money supply growth accelerates in January
Euro area money supply (M3) growth accelerated to 3.3 percent in January 2026, up from 2.8 percent in December. The narrower aggregate M1 also saw a stronger increase, while credit dynamics showed mixed trends.
M3 and M1 show stronger momentum
The broad monetary aggregate M3 saw its annual growth rate increase to 3.3 percent in January 2026, up from 2.8 percent in December.
Over the three months leading up to January, M3 growth averaged 3.0 percent.
The narrower aggregate M1, which includes currency in circulation and overnight deposits, also accelerated, rising to 5.3 percent in January from 4.7 percent in December.
This stronger M1 growth was the primary driver for M3, contributing 3.3 percentage points to its annual growth.
Other short-term deposits (M2 minus M1) continued to contract, with an annual growth rate of -0.6 percent, a slight decrease from -0.4 percent in December.
In contrast, marketable financial instruments (M3 minus M2) showed a notable turnaround, increasing to 1.6 percent in January from -0.6 percent in the previous month, indicating a shift in portfolio allocation.
Mixed signals from credit and deposits
Credit developments showed mixed trends.
Adjusted loans to private households held steady at 3.0 percent annually, while those to non-financial corporations decelerated to 2.8 percent from 3.0 percent in December.
Total claims on euro area non-MFIs increased slightly to 2.4 percent.
Regarding deposits, household deposits grew by 3.2 percent, up from 3.0 percent.
Deposits from non-financial corporations remained at 3.4 percent.
A notable surge was observed in deposits from investment funds (excluding money market funds), which accelerated significantly to 9.8 percent in January from 3.7 percent in December, indicating shifts in financial asset allocation.
Monetary pulse quickens, credit lags
The acceleration in M3 and M1 growth suggests an easing of financial conditions, yet mixed credit dynamics, particularly the slowdown in corporate lending, indicate underlying economic caution.
The surge in investment fund deposits points to portfolio reallocations, not necessarily a direct boost to real economic activity.
This divergence highlights the ongoing challenge for the ECB in assessing its policy impact on the broader economy.
Source: Geldmengenentwicklung im Euroraum: Januar 2026
IN: