Fresh lending data from the European Central Bank has provided another sign of slowing economic growth across the continent (Daniel ROLAND)

Frankfurt am Main (AFP) – The pace of growth in lending to eurozone households and businesses fell back in March, European Central Bank data showed Monday, in a fresh pointer towards slowing growth across Europe.

Overall growth in loans to the private sector inched down to 3.1 percent year-on-year, from 3.2 percent in February, the figures adjusted for some purely financial transactions showed.

Looking in more detail, credit growth to households also slowed by just 0.1 percentage points, to 3.2 percent.

But there was a sharper impact on expansion in lending to non-financial firms, which fell back 0.3 points to 3.5 percent.

The eurozone economy has been weighed down in recent months by uncertainty over multiple risks to the economic outlook, including a trade confrontation with US President Donald Trump’s White House and Brexit.

Also sapping confidence has been weaker global trade, in part down to softer performance in important emerging market economies like China — usually major consumers of European exports.

The gloom has prompted international organisations and the ECB to downgrade growth forecasts for the 19-nation eurozone, with most expecting little more than 1.0 percent expansion this year.

“Risks surrounding the euro area growth outlook remain tilted to the downside,” central bank chief Mario Draghi said earlier this month.

In December the ECB ended mass bond purchases designed to prop up growth by pumping cash through the financial system, but has held interest rates at historic lows and continues to reinvest the proceeds from the “quantitative easing” scheme.

Some economists wonder whether the central bank could soon be forced to restart net bond purchases to counter anaemic growth and inflation.

Meanwhile, others are suggesting positive surprises, like a Brexit deal, could help the eurozone bounce back in the second half of the year.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.