FRANKFURT--Eurozone bank lending to households has picked up and German business sentiment has improved, indicating the region's economy is maintaining its momentum despite lingering concerns about the sustainability of Greece's debt situation and China's economic outlook.
The European Central Bank said Monday that bank lending to households, adjusted for sales and securitization, rose 1.7% in June from the year-earlier period, a higher rate than in May.
But the provision of new credit remained uneven among the 19 countries sharing the euro and growth in loans to businesses was still depressed, the data showed.
"Overall bank lending to households and businesses are trending in the right direction, but the improvement is still pretty gradual at the moment and not as fast as the European Central Bank would undoubtedly like, particularly in relation to businesses," whose loans rose by just 0.1% from June last year, said Howard Archer, the chief economist at IHS.
But the eurozone's economic recovery remained on track, economists said, supported by the ECB's economic stimulus program, a weaker euro exchange rate and lower energy prices.
Staff at the ECB expect eurozone gross domestic product to expand by 1.5% this year, in light of a rapidly improving Spanish economy and sturdy growth in Germany.
Germany's Ifo think tank said Monday its business climate index for the eurozone's largest economy rose to 108.0 in July from a revised 107.5 in June and was above a forecast of 107.5 in a Wall Street Journal poll of economists.
"Manufacturers are clearly more optimistic about future business developments," Ifo President Hans-Werner Sinn said, as a weaker euro makes German goods more competitive outside the eurozone.
Ifo said that business managers were relieved that the imminent threat of Greece leaving the currency area was averted. The indebted country managed in mid-July to clinch a last-minute agreement with other eurozone members that could pave the way for fresh loans.
"Despite Greece, China and other irritants, the eurozone recovery is on track and looks set to pick up some extra momentum later this year," said Holger Schmieding, the chief economist at Berenberg. "Even German businesses, who tend to react sensitively to any global disturbance, are shrugging off the Greek noise," he said.
The mood among Dutch manufacturers, however, was slightly less upbeat in July, reflecting a more cautious view on production levels in the next three months, data from the Dutch statistics agency showed Monday. The producer confidence index dipped to +3.7 from +4.6 in June, when it reached a four-year high.
