(MENAFN- AFP) Depressed demand for loans in the eurozone is continuing to stabilise, data published by the European Central Bank showed on Thursday.
The ECB compiles monthly statistics on loans to the private sector, which are a key gauge of economic health and particularly closely watched at the moment since chronic weakness in credit is seen as the main hurdle to a more sustained recovery in the single currency area.
The ECB's latest data showed that in October loans to the private sector in the euro area fell by 1.1 percent year-on-year, a slightly slower rate of decline than the 1.2-percent decline seen in September.
At the same time, the ECB calculated that growth of the overall eurozone money supply -- a barometer for future inflation -- stood at 2.5 percent, the same rate of change as in September.
The EB regards M3 money supply as a barometer for future inflation.
The two sets of data provided some room for encouragement, analysts said.
"The very gradual upswing in the eurozone's credit cycle continued in October," said Berenberg Bank economist Christian Schulz.
The contraction in loans was now shallower than it has been since April 2013 and much better than the trough in January this year, Schulz said.
BayernLB economist Christiane von Berg agreed that the October data "support the picture of a stabilisation in the monetary dynamic in the euro area."
Nevertheless, momentum was still very weak, she cautioned.
IHS Global Insight analyst Howard Archer felt the latest money supply and bank lending data were "of little comfort to the ECB and hardly eases pressure for further action.
"The best that can be said is that the year-on-year fall in bank lending to businesses is moderating, while money supply growth has risen from its lows," Archer said.
"There is little evidence in this data that the stimulative measures announced by the ECB in June and September are having much positive impact, although it will clearly take time for all the measures to be enacted and take full effect," the expert concluded.
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