RegStream

The euro area outlook and monetary policy

HKIMR-ECB-BOFIT Joint Conference “Europe, Asia and the Changing Global Economy”

Hong Kong

14 January 2025

0

Philip R. Lane Member of the Executive Board

www. ecb. europa. eu ©

Inflation Rubric

Headline and core inflation

(Q4-on-Q4 percentage changes)

Sources: Eurostat and ECB calculations.

Note: The latest observations for realised HICP and HICPX are for the fourth quarter 2024 (including December flash estimate).

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-2024681012201620172018201920202021202220232024202520262027 Realised HICP Realised HICPX HICP December 2024 Eurosystem staff projections HICPX December 2024 Eurosystem staff projections

Activity Rubric

GDP, consumption and investment

(index: Q4 2019 = 100)

GDP, consumption and investment

(quarter-on-quarter percentage changes)

Sources: Eurostat and ECB staff calculations.

Notes: The investment series excludes Ireland. The latest observations are for the third quarter of 2024.

Sources: Eurostat and ECB staff calculations.

Notes: The investment series excludes Ireland. The latest observations are for the third quarter of 2024.

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80859095100105110Q4 19Q4 20Q4 21Q4 22Q4 23 Real GDP Private consumption Investment Q3 24

-1. 5-1. 0-0. 50. 00. 51. 01. 52. 0Q4 21Q4 22Q4 23 Real GDP Private consumption Investment Q3 24

Supply and demand Rubric

Supply and demand drivers of headline inflation dynamics (annual percentage changes and percentage change contributions; deviations from mean)

Sources: Eurostat, ECB, Eurosystem, and ECB staff calculations.

Notes: Historical decomposition based on a large BVAR model accounting for a rich set of inflation drivers, identified with zero and sign restrictions; see Bańbura, M. , Bobeica, E. and Martínez Hernández, C. , (2024), “What drives core inflation? The role of supply shocks”, Working Paper Series, No 2875, ECB. The chart shows the deviations of HICP inflation from the mean implied by the model. The latest observations are for December 2024.

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-4-2024681020202021202220232024Global supply Domestic supply Domestic demand Global demand Idiosyncratic HICP-Headline

External dimension Rubric

USD/EUR and NEER

Current account

(left-hand side: level; right-hand side: index: 1999=100)

(Percentage of GDP, four-quarter moving sum)

Sources: ECB and ECB staff calculations.

Notes: Nominal effective exchange rate for 41 trading partners (NEER 41). The latest observations are for 10 January 2025.

Sources: ECB (BoP) and Eurostat (National accounts).

Note: The latest observation is for the third quarter of 2024.

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-2-101234Q499Q401Q403Q405Q407Q409Q411Q413Q415Q417Q419Q421Q423 Q324

80901001101201300. 81. 01. 21. 41. 61. 8199920042009201420192024 USD/EUR (left-hand side) EUR NEER (right- hand side)

December 2024 Eurosystem staff projections: baseline Rubric

December 2024 Eurosystem staff projections: key macroeconomic variables

Note: Revisions calculated based on rounded figures.

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2024202520262027202420252026HICP2. 42. 11. 92. 1-0. 1-0. 10. 0HICP excl. energy and food2. 92. 31. 91. 90. 00. 0-0. 1Compensation per employee4. 63. 32. 92. 80. 1-0. 3-0. 3Unit labour costs4. 72. 62. 02. 00. 20. 0-0. 1Real GDP0. 71. 11. 41. 3-0. 1-0. 2-0. 1Private consumption0. 91. 31. 31. 20. 1-0. 1-0. 2Government consumption2. 31. 21. 21. 01. 10. 10. 1Total investment-1. 71. 22. 21. 6-1. 20. 00. 1Unemployment rate (% of labour force)6. 46. 56. 36. 1-0. 10. 0-0. 2Q4 2024Q4 2025Q4 2026Q4 2027Q4 2024Q4 2025Q4 2026HICP2. 32. 01. 92. 1-0. 30. 00. 0HICP excluding energy and food2. 82. 11. 91. 9-0. 10. 00. 0Compensation per employee4. 22. 92. 92. 7-0. 1-0. 4-0. 1Unit labour costs3. 72. 01. 91. 90. 0-0. 20. 0Real GDP1. 11. 21. 51. 20. 0-0. 30. 1Private consumption1. 21. 21. 31. 10. 3-0. 3-0. 1Government consumption2. 10. 61. 60. 61. 7-0. 90. 7Total investment-1. 50. 32. 51. 2-0. 8-1. 00. 2Unemployment rate (% of labour force)6. 46. 46. 26. 0-0. 1-0. 1-0. 2December 2024(annual percentage change)December 2024(Q4-on-Q4 percentage change)vs September 2024(percentage points)vs September 2024(percentage points)

ECB/Eurosystem staff projections and PMIs Rubric

Evolution of GDP growth projections

Composite, manufacturing and services

(Q4-on-Q4)

(annual percentage changes)

PMIs

(diffusion indices)

Sources: ECB and Eurosystem staff projections.

Evolution of HICP inflation projections

(Q4-on-Q4)

(annual percentage changes)

Sources: ECB and Eurosystem staff projections.

Source: S&P; Global.

Notes: Dotted lines refer to 2015-19 means. “Output” and “new orders” correspond to manufacturing and composite and “business activity” and “new business” to services. The latest observations are for December 2024.

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HICP12/2303/2406/2409/2412/24Q4 20242. 62. 22. 52. 62. 3Q4 20252. 01. 92. 02. 02. 0Q4 20261. 91. 91. 81. 91. 9Q4 2027---- 2. 1

GDP12/2303/2406/2409/2412/24Q4 20241. 31. 11. 51. 11. 1Q4 20251. 51. 71. 41. 51. 2Q4 20261. 51. 51. 61. 41. 5Q4 2027----1. 2

4045505501/2405/2409/24 Composite Manufacturing Services 12/24

4045505501/2405/2409/24 12/24Output / Business activityNew orders / New business

Private consumption Rubric

Real private consumption growth

decomposition

(annual percentage changes)

Change in the household saving rate

(percentage point changes since the second quarter of 2022

and percentage point contributions)

Sources: Eurostat, December 2024 Eurosystem staff projections and ECB calculations.

Note: An increase in the saving rate implies a negative contribution of savings to consumption growth.

Sources: Eurostat, ECB, Quarterly Sector Accounts (QSA) and ECB calculations.

Notes: The chart shows the contributions of real household income, real net wealth, real interest rates and consumer confidence to the cumulative changes in the household saving rate since the second quarter of 2022, based on an estimated error correction model for private consumption growth and taking the growth in real household income as given.

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-2-1012345Q3Q4Q1Q2Q3Q4Q1Q2Q3202220232024 Household income Net wealth Interest rate Consumer confidence Unexplained Saving rate

-1. 5-1. 0-0. 50. 00. 51. 01. 52. 02. 520232024202520262027 Real disposable income Change in saving rate Real private consumption

Housing investment Rubric

Housing investment and short-term

Housing investment turning points

indicators

(left-hand side: quarter-on- quarter percentage changes; right-

hand side: diffusion indices, monthly)

(cumulative changes)

Sources: Eurostat, DG-ECFIN, S&P; Global, ECB and ECB calculations.

Notes: The European Commission (EC) indicator includes specialised activities (i. e. the construction of parts of buildings or preparation thereof, e. g. concrete work, bricklaying, etc. ) and is transformed to have the same mean and standard deviation as the PMI. The latest observations are for the third quarter of 2024 for housing investment and December 2024 for all the other series.

Sources: Eurostat, ECB and ECB calculations.

Note: The modified Bry-Boschan algorithm is used to date the turning points in the monetary policy rate (measured as the three-month EURIBOR)//the start of the easing cycle.

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-4-3-2-101Q1 24Q2 24Q3 24Q4 24 Housing investment: realised Building construction production (incl. specialised activities) 303540455055 EC: Building construction activity over past 3 months (rhs) PMI: Housing construction activity (rhs)

-15-10-5051004812Cumulative change in euro areahousing investmentQuarters since the start of easing cycle 2001-2004 2008-2010 2011-2012 2014-2017 2024-

Business investment Rubric

Business investment and capital goods

Limits to production in the capital goods

(quarter-on-quarter percentage changes, standardised surveys)

indicators

sector

(percentage balances)

Sources: Eurostat, S&P; Global, DG-ECFIN and ECB calculations.

Notes: Non-construction investment excludes Irish Intellectual Property Products (IPP). NA stands for National Accounts. PMIs as a deviation from 50, divided by 10. Confidence is standardised. The latest observations are for the third quarter of 2024 for investment, December 2024 for industrial confidence and November 2024 for the other variables.

Source: DG-ECFIN.

Notes: The series are adjusted to the 2008-19 average. The latest observations are for the fourth quarter of 2024.

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-20-100102030405060708020232024 Insufficient demand Shortage of space and/or equipment Shortage of labour Other (including financial) constraintsQ4 24

-1. 5-1. 0-0. 50. 00. 51. 0Q1 24Q2 24Q3 24Q4 24 Non-construction investment (NA)

Industrial confidence PMI output PMI new orders

Global trade Rubric

Shipping prices (indices, 02/01/2020 = 1)

World (excluding euro area) imports of

goods

(annual percentage changes, percentage point

contributions, three- month moving average)

US – chips and AI-related imports (three-month-on-three-month percentage changes)

Sources: Drewry shipping consultants via Haver Analytics and ECB staff calculations.

Note: The latest observations are for 9 January 2025.

Sources: Trade Data Monitor (TDM) and ECB staff calculations.

Notes: Adjusted Broad Economic Categories (BEC) definitions to account for technological and energy goods. Technological goods include products from two-digit categories such as 84, 85, 87 and 88. In particular, semiconductor product definitions at four digits (8541, 8542, 8486) are also considered. The latest observations are for October 2024.

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Sources: Trade Data Monitor (TDM), Global Trade Alert (GTA) and ECB staff calculations.

Notes: The list of chips and AI- related products was retrieved from Global Trade Alert announcements of policies targeted at AI, chips and quantum-related technologies. There were 259 such six-digit harmonised commodity system (HS) products identified. The latest observations are for October 2024.

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-3-2-1012345601/2403/2405/2407/2409/24 Technology Capital Consumption Energy Intermediates Others Total

-15-10-5051015123456789101112 Min-max range 2017-2023 Median 2017-2023 2024

01234512/2302/2404/2406/2408/2410/2412/24 Shanghai to New York Shanghai to Los Angeles Shanghai to Rotterdam 09/01/25

Exports Rubric

Projected extra-euro area

export volumes

(annual percentage change)

Euro area goods export volumes (three-month-on-three-month percentage change)

PMI new export orders

(diffusion index)

Sources: December 2024 Eurosystem staff projections and September 2024 ECB staff projections.

Sources: Eurostat and Central Planning Bureau.

Notes: Global imports are in volumes; goods exports are in volume index. The underlying data are seasonally adjusted. As export volume data for October is not available, the latest data point is approximated by deflating October values with industrial export prices. The latest observations are for October 2024.

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Sources: S&P; Global and ECB staff calculations.

Notes: The car sector is included in the manufacturing PMI. A diffusion index is obtained by adding together the percentage of respondents reporting “higher” and half of the percentage of respondents reporting “the same”. A number bigger than 50 indicates an expansion; an index smaller than 50 indicates a contraction. The latest observations are for December 2024.

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-2-10123420232024202520262027 Revisions vs September 2024 MPE December 2024 BMPE

-3-2-1012301/2404/2407/2410/24 Extra-euro area exports Global imports excluding euro area

25303540455001/2403/2405/2407/2409/2411/24 Manufacturing Cars Services 12/24

Car sector Rubric

New vehicle registrations in the

Extra-EU BEV imports,

EU

(year-on-year growth)

by country of origin

(share of total)

China-produced battery electric

vehicles exported into the EU

(left-hand side: share of total BEV sales in the EU;

right-hand side: share of total sales by non-

Chinese brands only)

Sources: Acea (European Automobile Manufacturers Association), Haver Analytics.

Notes: The category “EV” includes battery electric vehicles (BEV) and “Other EV”, as hybrid and plug-in hybrid vehicles. “Non-EV” includes petrol and diesel-powered vehicles. The latest observations are for November 2024.

Source: TDM.

Notes: BEV stands for battery electric vehicles, ROW refers to the rest of the world. Observations are an average from January 2024 to October 2024.

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Sources: JATO Dynamics, Bloomberg.

Notes: BEV stands for battery electric vehicles. The chart shows sales data for battery electric vehicle models sold in a sample of EU countries.

The brand data includes only those models which are exclusively produced in China. Information on whether a model is produced in China is based on 2023 annual reports and available plant-level production data from Bloomberg.

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010203040506070809010001/24-09/24 EU brands Non-EU brands

051015202501/24-09/24 Non-Chinese brands Chinese brands

-20-10010203001/2307/2301/2407/24 EV Non-EV Total 11/24

010203040506070ChinaUSJapanKoreaUKROW

Labour market Rubric

Transitions into and out of

Indeed job postings

Labour shortages

employment

(millions)

(thousands)

(left-hand side: percentage of firms; right-hand

side: percentage of job posts)

Sources: Eurostat and ECB staff calculations.

Note: The latest observations are for the third quarter of 2024.

Source: Eurostat.

Notes: New job postings represent a two-quarter moving average and refer specifically to job postings that include wage information. For reference, see Adrjan, P. and Lydon, R. (2023), “What do wages in online job postings tell us about wage growth?”, 20 December. The latest observations are for November 2024.

Sources: Eurostat, DG-ECFIN and ECB calculations.

Note: The latest observations are for the third quarter of 2024 for the job vacancy rate and the fourth quarter of 2024 for labour shortages.

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6. 006. 256. 506. 757. 007. 257. 507. 75Q1 22Q3 22Q1 23Q3 23Q1 24Q3 24 Into employment Out of employment

1. 01. 52. 02. 53. 03. 5152025303540Q1 22Q3 22Q1 23Q3 23Q1 24Q3 24 Labour shortages - Manufacturing Labour shortages - Services Labour shortages - Construction Job vacancy rate (right-hand side) Q4 24

1001251501752002252501600180020002200240026002800Q1 22Q4 22Q3 23Q2 24 Indeed job postings (total) New job postings (right-hand side) Q4 24

Fiscal projections

Rubric

Budget balance and fiscal stance

(percentages of GDP, percentage points of potential GDP)

Overview of fiscal projections (percentages of GDP and percentage points)

Source: December 2024 Eurosystem staff projections.

Notes: The fiscal stance is calculated as the change in the cyclically adjusted primary balance net of the assistance to the financial sector and the Next Generation EU grants on the revenue side (in percentage points of potential GDP). Calculations for the fiscal stance harmonised in the current definition are only available as of 2004 for the euro area aggregate comprising all 20 current member countries.

Source: December 2024 Eurosystem staff projections.

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-8-7-6-5-4-3-2-10121999200220052008201120142017202020232026 Fiscal stance Budget balance

2019202320242025202620272023202420252026Budget balance-0. 5-3. 6-3. 2-3. 1-3. 0-2. 90. 00. 10. 10. 0Total revenues 46. 545. 946. 546. 746. 646. 3-0. 5-0. 10. 10. 0Total expenditures 47. 049. 549. 649. 849. 749. 1-0. 4-0. 20. 00. 0Interest expenditure

(2)1. 61. 71. 92. 02. 12. 20. 00. 00. 10. 1Primary balance

(3)1. 1-1. 8-1. 3-1. 1-0. 9-0. 70. 00. 20. 20. 1Gross debt

(6)83. 787. 487. 888. 388. 788. 6-0. 8-0. 7-1. 0-1. 1Interest rate-growth differential-1. 1-3. 6-1. 2-1. 0-1. 0-0. 80. 10. 40. 20. 0Deficit-debt adjustment0. 3-0. 40. 20. 40. 40. 00. 0-0. 1-0. 3-0. 1Fiscal stance (adj. for NGEU)-0. 3-0. 20. 90. 10. 10. 6-0. 20. 30. 0-0. 2December 2024Revisions since September 2024(percentage of GDP)(percentage points)

Underlying inflation and inflation momentum Rubric

Measures of underlying inflation

(annual percentage changes)

Momentum of inflation and its

subcomponents

(annualised three-month-on-three- month percentage changes)

Sources: Eurostat and ECB calculations.

Note: The latest observations are for December 2024 (flash estimate) for HICPX, HICP excluding energy and HICP excluding unprocessed food and energy, and November 2024 for the rest.

Sources: Eurostat and ECB calculations.

Notes: Calculated using seasonally adjusted data. The latest observations are for December 2024 (flash estimate).

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-20-1001020-8-404812/2306/2412/24 HICP Food Energy (rhs)

-1012345612/2306/2412/24 HICPX Goods Services

1234512/2304/2408/24 Supercore PCCI PCCI excl. energy

1234512/2304/2408/2412/24 HICPX HICPXX HICP excl. unprocessed food and energy HICP excl. energy Trimmed mean (10%) Trimmed mean (30%) Domestic inflationExclusion based measuresModel based measures 11/24

Wage pressures Rubric

Labour cost indicators in the euro area

and their forecasts (annual percentage changes)

ECB wage tracker (annual percentage changes)

Sources: Eurostat, ECB, September 2024 ECB staff projections, December 2024 Eurosystem staff projections and ECB calculations.

Note: The latest observations are for the third quarter of 2024.

Sources: Wage tracker calculated based on micro data on wage agreements provided by Deutsche Bundesbank, Banco de España, the Dutch employer association (AWVN), Österreichische Nationalbank, Bank of Greece, Banca d’Italia and Banque de France.

Notes: The euro area aggregate for the wage tracker is based on data for Germany, France, Italy, Spain, the Netherlands, Austria and Greece. The latest observations are for December 2025.

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01020304050600. 01. 53. 04. 56. 07. 59. 0202320242025 Share of employees covered (right-hand side) ECB wage tracker ECB wage tracker excluding one-off payments ECB wage tracker including unsmoothed one-off payments

1234567Q1 23Q3 23Q1 24Q3 24 Compensation per employee (September 2024 MPE) Compensation per employee (and December 2024 BMPE) Unit labour costs (and December 2024 BMPE) Compensation per hour

1234567Q4 24Q4 25Q4 26Q4 27

ECB wage tracker Rubric

12-months-ahead growth for contracts signed in 2024 by preceding signing year

(annual percentage changes)

Workers covered by expiring agreements

by signing year (millions of workers)

Sources: Wage tracker calculated based on micro data on wage agreements provided by Deutsche Bundesbank, Banco de España, the Dutch employer association (AWVN), Österreichische Nationalbank, Bank of Greece, Banca d’Italia and Banque de France.

Note: 12-months-ahead wage growth excluding one-off payments for agreements signed in 2024.

Sources: Wage tracker calculated based on micro data on wage agreements provided by Deutsche Bundesbank, Banco de España, the Dutch employer association (AWVN), Österreichische Nationalbank, Bank of Greece, Banca d’Italia and Banque de France.

Notes: The x-axis represents the quarter when contracts are due to expire. Colours refer to when these agreements were signed.

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Wage pressures and domestic price pressures Rubric

Decomposition of compensation per

employee growth

(annual percentage changes and percentage point contributions)

GDP deflator

(annual percentage changes and percentage point

contributions)

Sources: Eurostat, December 2024 Eurosystem staff projections and ECB calculations.

Notes: The diamonds are projections based on the December 2024 Eurosystem staff projections. The latest observations are for the third quarter of 2024.

Sources: Eurostat, December 2024 Eurosystem staff projections and ECB calculations.

Notes: Unit net taxes reflect taxes minus subsidies. When the contribution of subsidies on products is larger than the contribution of indirect taxes, the unit net tax contribution turns negative. The latest observations are for the third quarter of 2024.

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-2-10123456Q1 22Q3 22Q1 23Q3 23Q1 24Q3 24 Wage drift plus social contributions Negotiated wages Compensation per employee

2024202520262027

-101234567Q1 22Q3 22Q1 23Q3 23Q1 24Q3 24 Unit labour costs Unit profits Unit net taxes GDP deflator

2024202520262027

Inflation expectations Rubric

Consumer Expectations Survey

(annual percentage changes)

Euro area inflation- linked swap rates (percentages per annum)

Balance of risks for inflation from ECB Survey of Monetary Analysts

(percentages per annum)

Sources: Eurostat and Consumer Expectations Survey (CES).

Notes: The series refer to the median value for the CES. The latest observations are for December 2024 (flash estimate) for HICP and November 2024 for the rest.

Sources: LSEG, Bloomberg and ECB calculations.

Notes: Premia-adjusted forward ILS rates are an average of estimates from two affine term structure models (as in Joslin, S. , Singleton, K. and Zhu, H. (2011)) applied to ILS rates non-adjusted for the indexation lag (see Burban, V. et al. (2021)). The latest observations are for 10 January 2024.

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Source: ECB Survey of Monetary Analysts.

Notes: Percentages may not add up to 100 due to rounding. The latest observations are for December 2024.

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1. 752. 002. 252. 502. 75Aug-23Feb-24Aug-24 EA 5y5y ILS expectation component EA 5y5y ILS10/01/25

24183136616851581514186050100December-24October-2 4December-24October-2420262025 Downside Balanced Upside

024681001/2307/2301/2407/24 Perception of past inflation Inflation expectations one yearahead Inflation expectations three yearsahead HICP 12/24

Monetary aggregates and counterparts Rubric

M3 and M1 dynamics (annual percentage changes)

Sources of money creation (average monthly flows in EUR billions)

Sources: ECB (BSI) and ECB calculations.

Notes: Figures for M3 and M1 are adjusted for the operational incident in TARGET2 which inflated the September 2022 figures for OFI deposits and loans, reversing them in October and November 2022. The latest observation are for November 2024.

Sources: ECB (BSI) and ECB calculations.

Notes: Figures for M3 are adjusted for the operational incident in TARGET2 which inflated the September 2022 figures for OFI deposits and loans, reversing them in October and November 2022. The latest observation are for November 2024.

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-15-10-505101501/2204 /2207/2210/2201/2304/2307/2310/2301/2404/2407/2410/24 M3 (annual growth rate) M3 (three-month annualised growth rate) M1 (annual growth rate) M1 (three-month annualised growth rate)

-200-100010020007 /2408/2409/2410/2411/24

-200-1000100200Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q3 24 Other counterparts Other claims on the private sector Decline in central government deposits Bank long-term liabilities (inverted) Bank claims on the general government Eurosystem net purchases Net external monetary flows Loans to firms and households M3

Near-term rate expectations and the real yield curve Rubric

€STR forward curve and survey

expectations of the deposit facility rate

(percentages per annum)

Real yield curves (percentages per annum)

Sources: LSEG, Bloomberg and ECB calculations.

Notes: The DFR expectations from Bloomberg are adjusted for the current €STR versus DFR spread. Estimates are based on two affine term structure models, with and without survey information on rate expectations (both variations of Joslin, S. , Singleton, K. and Zhu, H. (2011)), and a lower bound term structure model (following Geiger, F. and Schupp, F.

(2018)) incorporating survey information on rate expectations. The latest observations are for 10 January 2025.

Sources: Bloomberg, LSEG and ECB calculations.

Notes: The real rate is calculated by subtracting the inflation-linked swap rate from the nominal overnight indexed swap rate. The latest observations are for 10 January 2024.

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1. 52. 02. 53. 03. 54. 02023202420252026 €STR forward curve adjusted for term premia (latest) €STR forward curve (latest) €STR forward curve pre-US elections (05/11) €STR forward curve pre-December GovC (11/12) €STR forward curve (27 December 23) Realised €STR Bloomberg median (Dec 24)Bloomberg 25th-75th percentiles 12/26

-0. 50. 00. 51. 01Y2Y3Y4Y5Y6Y7Y8Y9Y10Y Real yield curve (latest) Real yield curve (December GovC)

Bank funding costs and credit standards Rubric

Bank funding costs

(percentages per annum)

Cumulated change in credit standards for

firms and households

(net percentages)

Sources: ECB (BSI, MIR, CSDB, MMSR), IHS Markit iBoxx and ECB calculations.

Notes: Marginal funding costs are the weighted average of new business costs for overnight deposits, deposits redeemable at notice, time deposits, bonds and interbank borrowing, weighted by outstanding amounts. Average funding costs use the same weights but are based on the rate on outstanding deposits and interbank funding and yield to maturity at issuance for bonds. The latest observations are for November 2024 for monthly data and 10 January 2025 for daily data.

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Sources: ECB bank lending survey and ECB calculations.

Notes: Net percentages for credit standards are defined as the difference between the sum of the percentages of banks responding “tightened considerably” and “tightened somewhat” and the sum of the percentages of banks responding “eased somewhat” and “eased considerably”. Cumulation starts in the first quarter of 2022. The latest observations are for the third quarter of 2024.

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04080120160222324 Cumulative credit standards on loans to firms Cumulative credit standards on housing loans Q324 Q1 24 Q1 23 Q1 22

-101234501/01/2201/02/2301/03/24 Composite funding costs Deposit rate Bank bond yields Interbank rate Average funding costs10/01/25

Credit to firms, lending rates and use of loans by innovative firms Rubric

Firm debt financing

(left- hand side: average monthly flows in EUR

billions; right-hand side: annual percentage changes)

Firm cost of borrowing

(percentages per annum)

Share of firms borrowing

from banks

(percentages)

Sources: ECB (BSI, CSEC) and ECB calculations.

Notes: The seasonal adjustment for the net issuance of debt securities is not official. Bank loans are adjusted for sales, securitisation and cash pooling. The latest observations are for November 2024.

Sources: ECB (MIR), Consensus Economics and ECB calculations.

Notes: Real lending rates are constructed using the Consensus one-year ahead inflation expectations. Dashed lines are historical means calculated from January 1999 for nominal and real cost of borrowing (new business) and from January 2003 for cost of bank borrowing (outstanding amounts). The latest observations are for November 2024.

23

Sources: ECB survey on the access to finance of enterprises (SAFE) and ECB calculations.

Notes: Innovative firms are firms that, when responding to the SAFE, say that they introduced a new product or service in the market in the last 12 months (annual question). The chart shows the percentage of firms who reported having used bank loans over the last six months. The latest observations are for the third quarter of 2024.

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0102030Innovative firmsNot innovative firms

-303691215-1001020304050Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q3 2407/2408/2409/2410/2411/24 Net issuance of debt securities Bank loans to firms Annual growth rate (rhs)

12345601/2406/2411/24 Real cost of bank borrowing Cost of bank borrowing (outstanding amounts) Cost of bank borrowing (new business) Historical means

Credit to households, outlook and mortgage affordability Rubric

Bank loans to households

Bank lending to households over

(left-hand side: average monthly flows in EUR

billions; right-hand side: annual percentage changes)

gross disposable income

(percentages of gross personal disposable income)

Change in debt service ratio for typical newly granted mortgages

(percentage points)

Sources: ECB (BSI) and ECB calculations.

Notes: Bank loans are adjusted for sales, securitisation and cash pooling. The latest observations are for November 2024.

Sources: ECB (BSI, QSA) and ECB and Eurosystem staff projections.

Notes: Loans to households are adjusted for sales and securitisation.

The latest observations are for the second quarter of 2024. The third quarter is a nowcast.

Sources: ECB (MIR, QSA, RESR), ECB and Eurosystem staff projections and ECB calculations.

Note: The latest observations are for the second quarter of 2024, and the projections go until the fourth quarter of 2024.

24

www. ecb. europa. eu © -20-15-10-5051015202530Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q3 24Q4 24 Income contribution House price contribution Interest rate contribution Mortgage payment to income 6570758085902000200420082012201620202024 -303691215-60612182430Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23Q4 23Q1 24Q2 24Q3 2407/2408/2409/2410/2411/24 Other lending Credit for consumption Loans for house purchase Annual growth rate (rhs)