(MENAFN- AFP) New credit and money supply data for the 19-nation eurozone on Thursday offered tentative signs that the region's battered economy is slowly mending, analysts said.
The European Central Bank calculated that loans to the private sector -- a gauge of the single currency's economic health -- fell by just 0.1 percent in January, after long years of declines.
The fractional drop marked an improvement over the previous month when loans to the private sector had contracted by 0.5 percent.
The long and deep financial crisis in the 19 countries that share the euro has squeezed lending, thus dampening economic activity.
Looking at the eurozone money supply as a whole -- which the ECB regards as a barometer for future inflation -- there was also an improvement, with the broad M3 money indicator growing by 4.1 percent in January from a year earlier, faster than the 3.8 percent recorded in December.
Analysts welcomed the data.
"Today's money and credit data from the ECB surprised on the upside again," said Berenberg Bank economist Rob Wood.
While headline growth of private sector loans was still slightly negative, "that represents a significant turnaround over the past six months," Wood said.
The ECB's comprehensive assessment of banks last year along with significant economic progress in most of the former crisis countries were "gradually feeding through to stronger money and credit dynamics in the single currency area," the expert said.
"We look for eurozone growth to return to trend rates by the summer, though we remain cautious for the first quarter given the continued fighting in Eastern Ukraine and the Greek turmoil in recent weeks," he cautioned.
BayernLB economist Johannes Mayr was also confident that the latest data "reinforce the picture of a slight pick-up in economic momentum in the euro area."
But IHS Global Insight analyst Howard Archer viewed the data as "somewhat mixed for the ECB."
The ECB's range of monetary policy measures "are succeeding in lifting money supply growth," Archer said.
There were also signs of modest underlying improvement in the credit data, "but the fact that bank lending dipped in January itself highlights that there is still a long way to go," Archer said.
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