According to the latest Survey on the Access to Finance of Enterprises, covering the period from October 2016 to March 2017, euro area small and medium-enterprises have continued to signal improvements in the availability of bank loans. Market-based funding conditions, too, have improved significantly in response to the corporate sector purchase programme launched in June 2016.
The easing of financing conditions has underpinned the recovery in domestic demand, which is now the mainstay of growth in the euro area. As the unemployment rate continues to decline despite a rise in labour force participation, households’ real disposable income is improving. Given the broadly stable savings rate, increased labour income is translating into higher private consumption expenditure.