| Consensus | Consensus Range | Actual | Previous | |
| Y/Y - 3-Month Moving Average | 3.1% | 3.0% to 3.1% | 3.1% | 3.0% |
| Private Sector Lending -Y/Y | 3.4% | 3.2% |
Highlights
The March 2026 latest monetary data showed that headline M3 money supply growth edged up to 3.2 percent, with a 3-month average of 3.1 percent; however, but the composition reveals a subtle shift in the transmission mechanism of monetary expansion.
The softening of M1 money supply (4.6 percent from 4.8 percent) suggests cooling transactional demand, consistent with cautious household behaviour and moderating deposit growth. In contrast, the sharp rebound in marketable instruments (from minus 1.3 percent to 4.5 percent) indicates portfolio reallocation toward higher-yielding financial assets, likely reflecting persistent rate sensitivity.
Credit dynamics reinforce this interpretation. Lending to households remains flat at 3.0 percent, signalling stable but subdued consumption financing, while the uptick in loans to firms (3.2 percent) points to tentative recovery in corporate borrowing, possibly linked to investment normalisation.
On the other hand, stronger contributions from private sector claims and net external assets highlight improving credit intermediation and external positioning, though still partially offset by balance sheet drag from longer-term liabilities.
Overall, the latest report depicts a transition phase as liquidity is expanding modestly, but increasingly driven by financial market channels and corporate activity rather than household demand. These updates take the RPI to minus 32 and the RPI-P to minus 37, meaning that economic activities continue to lag market expectations in the euro area.
Market Consensus Before Announcement
Not much change seen in money growth, expected at 3.1 percent versus 3.0 percent a month earlier.
Definition
M3 is the European Central Bank's (ECB) preferred broad measure of money supply. Since January 1999, the ECB has tended to focus on the 3-month moving average of the annual growth rate to judge underlying M3 trends although the significance of its 4.5 percent reference rate has been downgraded with time. The private sector lending counterpart is usually seen as the most important element of the M3 report.
Description
While other central banks have virtually ignored money supply data, the European Central Bank has not. Thanks to the influence of the Bundesbank in organizing the ECB, M3 money supply was established as one of the 'two pillars' of monetary policy used by the ECB, the other being the harmonized index of consumer prices (HICP). While the target for HICP is two percent, the seemingly largely ignored reference target for M3 growth is 4.5 percent as measured by a three month moving average which is compared with the same three months a year earlier.
M3 measures overall money supply. It consists of M1 which is currency in circulation plus overnight deposits and M2 which include deposits with an agreed maturity up to two years plus deposits redeemable at up to three months' notice. Not all M3 measures are alike. For example, ECB M3 is approximately equivalent to the Federal Reserve's M2 measure. Because an increase in M3 leads to price inflation, this figure can also be indicative of the likelihood of future interest rate hikes.