Lending to euro zone companies surged in March as firms rushed for emergency funding amid the continent’s coronavirus-related lockdown, data from the European Central Bank showed on Wednesday.
With millions of people forced to stay home, the bloc came to a standstill last month and the economy could shrink by a tenth this year, forcing firms to find emergency cash to survive.
Indeed, lending growth to non-financial corporations rose to 5.4% in March from 3% a month earlier, its best rate since 2009, even as household lending slowed to 3.4% from 3.7%.
On Tuesday, the ECB’s own lending survey had shown that banks are expecting more demand for cash this quarter and with government guarantees in place, they may be more willing to lend to firms, even if household lending could still suffer.
The annual growth rate of the M3 measure of money supply accelerated to 7.5% from 5.5%, beating expectations for 5.5% in a Reuters poll.