Monetary developments in the euro area for April 2026, published this week by the European Central Bank (ECB), showed a broad easing in money supply growth alongside mixed signals in lending to households and firms.

The annual growth rate of the broad monetary aggregate M3 fell to 2.7 per cent in April 2026 from 3.2 per cent in March.

The ECB said M3 averaged 3.0 per cent over the three months to April, indicating a gradual moderation in monetary expansion across the euro area.

The narrower monetary aggregate M1, which includes currency in circulation and overnight deposits, slowed to 3.8 per cent in April from 4.7 per cent in March, with the March figure revised from 4.6 per cent.

The annual growth rate of short-term deposits other than overnight deposits (M2 minus M1) rose to 0.8 per cent in April from -0.1 per cent in March.

The annual growth rate of marketable instruments (M3 minus M2) declined sharply to 1.1 per cent in April from 4.2 per cent in March, reflecting weaker momentum in more liquid financial assets.

In terms of contributions, the narrower aggregate M1 added 2.4 percentage points to M3 growth, down from 3.0 percentage points in March.

The M2 minus M1 component contributed 0.3 percentage points, up from zero in the previous month.

The M3 minus M2 component contributed 0.1 percentage points, down from 0.3 percentage points in March.

Among deposit-holding sectors, households recorded an annual growth rate of deposits at 2.9 per cent, unchanged from March.

Deposits placed by non-financial corporations slowed, with the annual growth rate of corporate deposits falling to 3.8 per cent in April from 4.2 per cent in March.

Deposits held by investment funds other than money market funds contracted further, with the annual growth rate of -5.7 per cent in April compared with growth of 3.1 per cent in March.

On the counterparts of M3, the claims on the private sector contributed 2.9 percentage points, slightly down from 3.0 percentage points in March.

The net external assets contribution declined to 1.9 percentage points from 2.5 percentage points.

The claims on general government contribution moved to -0.2 percentage points, down from 0.2 percentage points previously.

The longer-term liabilities contribution improved marginally to -1.3 percentage points from -1.4 percentage points.

The remaining components of M3 contributed -0.6 percentage points, compared with -1.1 percentage points in March.

Total claims on euro area residents slowed, with the annual growth rate falling to 2.0 per cent in April from 2.4 per cent in March.

Within this, claims on general government declined to -0.4 per cent in April from a positive 0.4 per cent in March.

The annual growth rate of claims on the private sector also eased to 3.0 per cent in April from 3.2 per cent in March.

The annual growth rate of adjusted loans to the private sector remained stable at 3.5 per cent in April, unchanged from the previous month.

Within that, loans to households held steady at 3.0 per cent, showing no change from March.

The annual growth rate of loans to non-financial corporations increased slightly to 3.4 per cent in April from 3.2 per cent in March.

Taken together, the data point to a gradual cooling in money supply growth across the euro area, alongside relatively stable household borrowing and modestly improving corporate credit dynamics.