Results of the January 2017 euro area Banks- ECB


* Loan growth continues to be supported by increasing demand across all loan categories

Credit standards for loans to enterprises broadly stabilising

Continued easing of credit terms and conditions across all loan categories

Easing impact of TLTROs on credit standards increased

According to the January 2017 bank lending survey (BLS), credit standards (i.e. banks’ internal guidelines or loan approval criteria) for loans to enterprises tightened somewhat in net terms in the fourth quarter of 2016 (a net percentage of 3%, compared with 0% in the previous quarter), driven mainly by developments in the Netherlands. This was the first net tightening since the fourth quarter of 2013 and was broadly in line with expectations in the previous survey round. Banks’ lower willingness to tolerate risk was the main factor behind the slight net tightening of credit standards on loans to enterprises. Credit standards on loans to households for house purchase remained broadly unchanged (a net percentage of 1%, compared with -4% in the previous quarter). For the first quarter of 2017, banks expect a net easing of credit standards across all loan categories.

The net easing of banks’ overall terms and conditions on new loans (i.e. the actual terms and conditions agreed in the loan contract) continued across all loan categories, mainly driven by a further narrowing of margins.

Net demand continued to increase across all loan categories. The low general level of interest rates, merger and acquisition activity and debt refinancing remained the main contributing factors to net demand for loans to enterprises in the fourth quarter of 2016. Net demand for housing loans was driven by the low general level of interest rates, continued favourable housing market prospects and consumer confidence.

Euro area banks continued to adjust to ongoing regulatory and supervisory changes in the second half of 2016 by further strengthening their capital positions and reducing their risk-weighted assets. At the euro area level, banks reported a broadly neutral impact of regulatory or supervisory action on credit standards and credit margins.

Regarding the targeted longer-term refinancing operations (TLTROs) conducted by the Eurosystem, 37% of the euro area BLS banks reported that they had participated in the third TLTRO-II operation. Participation was driven by profitability motives, reflecting the attractiveness of the TLTRO-II. Banks continued to indicate that the main effect of the past TLTROs on loan supply was an easing of terms and conditions, but the easing impact on credit standards also increased.

The BLS, which is conducted four times a year, was developed by the Eurosystem in order to improve the understanding of banks’ lending behaviour in the euro area. The results reported in the January 2017 survey relate to changes in the fourth quarter of 2016 and expectations of changes in the first quarter of 2017, unless otherwise indicated.
 

Youth unemployment in EU

In November 2017, 3.698 million young persons (under 25) were unemployed in the EU28, of whom 2.624 million were in the euro area.
Compared with November 2016, youth unemployment decreased by 429 000 in the EU28 and by 286 000 in the euro area.
In November 2017, the youth unemployment rate was 16.2% in the EU28 and 18.2% in the euro area, compared with 18.2% and 20.5% respectively in November 2016.
In November 2017, the lowest rates were observed in the Czech Republic (5.0%) and Germany (6.6%), while the highest were recorded in Greece (39.5% in September 2017), Spain (37.9%) and Italy (32.7%).

Geographical information
The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

The European Union (EU28) includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.

Eurostat produces harmonised unemployment rates for individual EU Member States, the euro area and the EU.
These unemployment rates are based on the definition recommended by the International Labour Organisation (ILO).
The measurement is based on a harmonised source, the European Union Labour Force Survey (LFS).
- are available to start work within the next two weeks;
- and have actively sought employment at some time during the previous four weeks.
The unemployment rate is the number of people unemployed as a percentage of the labour force.

The labour force is the total number of people employed plus unemployed. In this news release unemployment rates are based on employment and unemployment data covering persons aged 15 to 74.

The youth unemployment rate is the number of people aged 15 to 24 unemployed as a percentage of the labour force of the same age. Therefore, the youth unemployment rate should not be interpreted as the share of jobless people in the overall youth population.
When data for the most recent month are not available for a Member State, EU and EA aggregates are calculated using the latest data available for that Member State.

Country notes
Belgium: Due to a methodological break in the LFS data for the 1st quarter of 2017, data prior to Q1 2017 are not comparable and therefore not shown.
Ireland: Due to a methodological change in the LFS data for the 3rd quarter of 2017, data for the youth and gender breakdowns are not yet available.
Germany, the Netherlands, Austria, Finland, Sweden and Iceland: the trend component is used instead of the more volatile seasonally adjusted data.
Denmark, Estonia, Hungary, Portugal, the United Kingdom and Norway: 3-month moving averages of LFS data are used instead of pure monthly indicators.
 

Euro area unemployment at 8.7%

EU28 at 7.3%

The Euro Area (EA19) seasonally-adjusted unemployment rate was 8.7% in November 2017, down from 8.8% in October 2017 and from 9.8% in November 2016.

This is the lowest rate recorded in the euro area since January 2009. The EU28 unemployment rate was 7.3% in November 2017, down from 7.4% in October 2017 and from 8.3% in November 2016.
This is the lowest rate recorded in the EU28 since October 2008. These figures are published by Eurostat, the statistical office of the European Union.

Eurostat estimates that 18.116 million men and women in the EU28, of whom 14.263 million in the euro area, were unemployed in November 2017.
 Compared with October 2017, the number of persons unemployed decreased by 155 000 in the EU28 and by 107 000 in the euro area. Compared with November 2016, unemployment fell by 2.133 million in the EU28 and by 1.561 million in the euro area.

Member States
Among the Member States, the lowest unemployment rates in November 2017 were recorded in the Czech Republic (2.5%), Malta and Germany (both 3.6%). The highest unemployment rates were observed in Greece (20.5% in September 2017) and Spain (16.7%).

Compared with a year ago, the unemployment rate fell in all Member States for which data is comparable over time. The largest decreases were registered in Greece (from 23.2% to 20.5% between September 2016 and September 2017), Portugal (from 10.5% to 8.2%), Croatia (from 12.5% to 10.4%) and Cyprus (from 13.1% to 11.0%).

In November 2017, the unemployment rate in the United States was 4.1%, stable compared to October 2017 and down from 4.6% in November 2016.

Portugal Economic Growth - DEC.17


Growth momentum is expected to remain strong next year thanks to healthy private consumption, a flourishing tourism sector, robust investment and a resilient external sector.

An anticipated fall in the growth of exports, however, will likely moderate the economy’s pace of expansion in 2018.

FocusEconomics Consensus Forecast panelists see the economy growing 2.1% in 2018, which is up 0.1 percentage points from last month’s forecast, and project GDP growth of 1.8% in 2019.

Portugal Economic Outlook - DEC.17


The economy is experiencing a momentous turnaround.

Quarter-on-quarter growth in Q3 was confirmed at 0.5%, up from 0.3% in Q2.

A rebound in private consumption, bolstered by positive consumer confidence and the ongoing recovery in the labor market, was behind Q3’s higher print.

Although confidence among households fell in November from October’s record high, overall economic sentiment in the month remained strong and points to a solid economic performance in the final quarter.

A critical turning point in Portugal’s recovery from the debt crisis that brought it to the brink of default five years ago came on 15 December, when Fitch Ratings upgraded the nation’s credit rating by two notches.

Citing “favorable debt dynamics”, supported by prudent fiscal measures and improving economic conditions, the agency raised the rating from junk status (BB+) to investment grade (BBB).

The move, which follows S&P’s upgrade to investment-grade status in September, means that Portuguese bonds will now be eligible to enter major bond indices for the first time in six years.

	VARIAÇÕES HOMÓLOGAS
	HOMOLOGOUS CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Particulares
Loans of Other Monetary Financial Institutions to Private Individuals
					Milhões de Euros
					Millions of Euros
Crédito		Concedido		Cobrança Duvidosa
Banking Credit	Installment Credit			Uncertain Collection
Habitação	OUT.16	94.907			2.394
Mortgage	OUT.17	93.386			2.095	-12,49%
Consumo	OUT.16	12.476			1.066
Consumption	OUT.17	13.482	8,06%		727	-31,80%
Outros Fins	OUT.16	8.907			1.390
Another Finality	OUT.17	7.741	-13,09%		1.838	32,23%
Total	OUT.16	116.290			4.851
Total	OUT.17	114.609	-1,45%		4.660	-3,94%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank

	VARIAÇÕES HOMÓLOGAS
	HOMOLOGOUS CHANGE
Empréstimos de Outras Instituições Financeiras Monetárias a Empresas Não Financeiras
Loans of Other Monetary Financial Institutions to Non-Financial Corporations
					Milhões de Euros
					Millions of Euros
	Crédito Concedido				Cobrança Duvidosa
Installment Credit				Uncertain Collection
	OUT.16	79.402			12.880
	OUT.17	74.202	-6,55%		10.139	-21,28%
Fonte: Boletim Estatístico do Banco de Portugal
Source: Portugal Central Bank