More loans were issued to the euro zone private sector in May than a month before, but money supply growth dropped by more than expected, European Central Bank (ECB) data showed today.
Analysts said the loan data was a sign that recovery in the 12-nation bloc remains on track.
The growth rate of euro zone loans to the private sector, a key gauge of economic activity, inched up to 5.6 per cent in May from 5.5 per cent in April, the ECB data showed.
"It looks as if the euro area recovery trend is continuing while liquidity is at the same time being reduced. That's something the ECB should rate as a very positive sign," said Mr Michael Schubert, an economist at Commerzbank.
Annual growth in M3 money supply eased by more than expected to 4.7 per cent in May from 5.5 per cent a month earlier, the data also showed.
Money supply growth has eased this year towards the 4.5 per cent growth rate the ECB says is compatible with non-inflationary growth.
The central bank has said excess liquidity poses no risk to inflation as long as the economy remains weak, but that it could become dangerous if it persists once growth picked up.
Money supply growth has become less prominent in the ECB's rhetoric after a review of its monetary policy strategy. But Mr Schubert said the decrease was still good news.
The ECB, which meets on Thursday to decide on interest rates, is widely seen staying put until the turn of the year. It is then expected to start tightening the monetary throttle as the single currency bloc picks up speed.