EcoWeek

Purely technical decline in the credit impulse in March 2021, rebound expected in the second quarter

Eco week 21-17 // 3 May 2021  
economic-research.bnpparibas.com  
6
ECONOMIC PULSE  
CREDIT IMPULSE: PURELY TECHNICAL DECLINE IN MARCH 2021, REBOUND EXPECTED IN THE SECOND QUARTER  
The credit impulse declined sharply in the eurozone in March 2021, While the euro area real GDP declined by 0,6% in the first quarter of  
reflecting the fall in the annual growth of bank loans outstanding, 2020 according to Eurostat preliminary estimate released on 30 April,  
although this resulted from a high base for comparison and was it was still 5,5% lower than it was in the fourth quarter of 2010. In  
thereforewidelyexpected. Movesbyeurozonegovernmentstointroduce this economic context, these movements in credit show the counter-  
support measures for companies’ financing led to exceptionally strong cyclical role being played by bank lending, which is very unusual in an  
growth in bank lending to non-financial corporations from March 2020 economic context such as this and very different, for example, to what  
onwards. However, despite the high base for comparison, credit growth happened in the 2008 crisis.  
remained substantial in March 2021 at 5.2%, especially given the  
For the second quarter of 2021, in line with the expected upturn in  
economic conditions. Putting the March 2020-February 2021 period  
economic output (and assuming that no economically damaging  
to one side, we have to go back to the aftermath of the previous crisis  
restrictions are imposed in order to control the pandemic), the banks  
to find such a high growth rate (5.5% in April 2009). Household loans  
taking part in the ECB’s Bank Lending Survey (conducted between 11  
outstanding saw weaker growth (3.3% year-on-year in March 2021),  
and 26 March 2021, results published on 19 April) expected credit  
but the resulting credit impulse – which has been constantly negative  
demand to accelerate among both companies and households. At the  
since April 2020 and fell between December 2020 and February 2021  
same time, credit institutions were planning to tighten their lending  
recovered to -0.1% in March 2021. For the first time since the start  
criteria moderately, but less than had been planned in the previous  
quarter, and the planned tightening was reduced more for business  
of the pandemic, annual growth in household loans outstanding has  
therefore almost recovered to the level seen at the time the first Covid-  
related restrictions were introduced, which is a fairly encouraging sign.  
clients.  
Laurent Quignon  
CREDIT IMPULSE IN THE EUROZONE  
Credit impulse*  
8
6
4
2
0
2
4
6
8
10  
12  
14  
16  
%
Real GDP Growth vs Bank Lending  
Annual growth rates**, %  
6
1
12  
8
4
0
4
8
-
-
-
-
Households  
NFC  
Private sector  
Real GDP, %, y/y  
-
-
Households  
NFC  
Private sector  
Real GDP, %, y/y  
-
-
-
-
-12  
-
-
16  
20  
2
007 2009 2011 2013 2015 2017 2019 2021  
2007  
2009  
2011  
2013  
2015  
2017  
2019  
2021  
ECB Bank Lending Survey, Expected (firms)  
ECB Bank Lending Survey, Expected ( households)  
1
00  
5
0
50  
25  
6
4
2
0
5
0
-
-
-
-
2
-
-
-
5
0
4
6
8
10  
15  
-25  
-50  
-75  
0
Consumer credit demand  
Consumer credit standards  
Housing credit demand  
Housing credit standards  
Real GDP, %, y/y [RHS]  
-10  
Credit standards to firms  
Credit demand of firms  
Real GDP, %, y/y [RHS]  
-
-
12  
14  
-
50  
-20  
-16  
2
007 2009 2011 2013 2015 2017 2019 2021  
2007 2009 2011 2013 2015 2017 2019 2021  
SOURCE: ECB SURVEY ON THE DISTRIBUTION OF CREDIT, BLS, BNP PARIBAS CALCULATIONS  
*
*
Credit impulse is measured as the annual change of the annual growth rate of MFI loans  
* Adjusted for securitizations  
The bank  
for a changing  
world  
QUI SOMMES-NOUS ? Trois équipes d'économistes (économies OCDE, économies émergentes et risque pays, économie bancaire) forment la Direction des Etudes Economiques de BNP Paribas.
Ce site présente leurs analyses.
Le site contient 2732 articles et 723 vidéos