Monetary developments in the euro area: January 2025

27 February 2025

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 increased to 3.6% in January 2025 from 3.4% in December, averaging 3.6% in the three months up to January. 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, increased to 2.7% in January from 1.8% in December. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 3.3% in January from 4.4% in December. The annual growth rate of marketable instruments (M3-M2) decreased to 14.7% in January from 15.8% in December.

Data for monetary aggregates

Looking at the components' contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 1.7 percentage points (up from 1.2 percentage points in December), short-term deposits other than overnight deposits (M2-M1) contributed 1.0 percentage points (down from 1.3 percentage points) and marketable instruments (M3-M2) contributed 0.9 percentage points (down from 1.0 percentage points).

Among the holding sectors of deposits in M3, the annual growth rate of deposits placed by households decreased to 3.3% in January from 3.5% in December, while the annual growth rate of deposits placed by non-financial corporations increased to 3.1% in January from 2.8% in December. Finally, the annual growth rate of deposits placed by investment funds other than money market funds decreased to 4.5% in January from 7.4% in December.

Counterparts of the broad monetary aggregate M3

The annual growth rate of M3 in January 2025, as a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), can be broken down as follows: net external assets contributed 2.9 percentage points (down from 3.5 percentage points in December), claims on the private sector contributed 1.9 percentage points (up from 1.7 percentage points), claims on general government contributed 0.1 percentage points (up from -0.4 percentage points), longer-term liabilities contributed -1.5 percentage points (up from -1.8 percentage points), and the remaining counterparts of M3 contributed 0.2 percentage points (down from 0.4 percentage points).

Data for contribution of the M3 counterparts to the annual growth rate of M3

Claims on euro area residents

The annual growth rate of total claims on euro area residents increased to 1.5% in January 2025 from 0.9% in the previous month. The annual growth rate of claims on general government increased to 0.3% in January from -1.0% in December, while the annual growth rate of claims on the private sector increased to 2.0% in January from 1.7% in December.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan transfers and notional cash pooling) increased to 2.3% in January from 2.0% in December. Among the borrowing sectors, the annual growth rate of adjusted loans to households increased to 1.3% in January from 1.1% in December, while the annual growth rate of adjusted loans to non-financial corporations increased to 2.0% in January from 1.7% in December.

Data for adjusted loans to the private sector

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 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.