Sharp Slowdown In The Growth Of Bank Lending For Eurozone And Germany Forecast  

• High-interest rates will keep a lid on the pace of bank lending in Europe this year and next, with a particular slowdown in growth in Germany as demand for loans tails off, according to a study by consulting firm EY.
• Lending to businesses and households in the 20-nation eurozone will expand 2.1% in 2023 and 1.7% in 2024, muted increases after a 14-year high of 5% in 2022, EY said in its lending forecast published Monday.
• The European Central Bank last year began raising interest rates in response to the highest inflation in decades, with a recent move in its key rate to a 22-year high and signals of more to come. The eurozone meanwhile dipped into recession earlier this year.
• "While the downturn is expected to be very shallow and short-lived, European markets continue to face high inflation and an unprecedented rise in interest rates. As a result, lending volumes are expected to be challenged by a fall in loan demand, at least for the next two years," EY said.

(Source: Reuters)