Survey on the Access to Finance of Enterprises: firms report moderate tightening of financing conditions

Survey on the Access to Finance of Enterprises: firms report moderate tightening of financing conditions

• Euro area firms reported that financing conditions tightened further in the first quarter of 2024, but much less so than in the fourth quarter of 2023.
• Firms reported a modest reduction in the need for bank loans, while fewer firms reported a reduction in the availability of bank loans. As a result, the increase in the financing gap was smaller than in the previous survey round.
• Fewer enterprises reported an increase in turnover over the last three months, but firms were more optimistic on developments in the next quarter. Cost pressures remained widespread across size classes but declined somewhat – particularly for interest expenses.
• Firms expected their selling prices and wages to increase by averages of 3.3% and 3.8% respectively in the next 12 months, with both figures representing a moderation relative to the previous survey round.
• Firms’ inflation expectations declined, with their median expectations for annual inflation in one, three and five years standing at 3.4%, 3.0% and 3.0% respectively. Firms considered that risks to the inflation outlook in five years were tilted to the upside, rather than the downside. (...)