Eurozone loans to private sector still contracting: ECB

Brussels: Loans to the private sector in the euro area -- a gauge of economic health -- are contracting at a faster rate than before, European Central Bank data showed on Monday.

The volume of loans to private businesses and households declined by 2.0 percent in May, after already falling by 1.8 percent the previous month, the ECB said in a statement. 

The data will dampen hopes for a tentative recovery in credit demand in the 18 countries which share the euro, where the long and deep financial crisis caused credit to dry up almost completely.

At the same time, the overall eurozone money supply grew by 1.0 percent in May, up from 0.7 percent in April. March.

The ECB regards M3 money supply as a barometer for future inflation.