Economic liquidity also remains ample, as reflected in the narrow money (M1) and broad money (M2) aggregates, which grew 13.5% (yoy) and 9.1% (yoy) respectively, as shown in Graph 7.b. Money supply growth stems from an increase in savings and quasi-money in line with income from high private consumption.
The pace of share repurchases accelerated strongly in 2005, especially in the fourth quarter, when they exceeded $ billion at an annual rate. These accelerated shareholder payouts were to be expected given that repatriated profits from firms’ foreign operations had become available to finance investment, acquisitions, and retire debt. In addition, signs of changing business attitudes towards expansion have emerged.