The Zhitong Finance App learned that the quarterly survey released by the European Central Bank on Monday shows that as fuel prices rise and operating costs rise, the financial situation of Eurozone companies is under heavy pressure, and it is becoming increasingly difficult to obtain bank credit.
Obstacles to financing have increased, and banks tend to be cautious in lending
The ECB has been gradually raising interest rates to curb energy-driven inflation. The market generally expects the ECB to stand still this week to obtain more evidence on how borrowing costs (including the bond market) affect the economy.
The ECB's latest quarterly survey shows signs of tension in Eurozone corporate financing channels. Businesses generally report rising interest rates on loans and a decline in the availability of bank loans. When businesses are in desperate need of more credit lines, they find it increasingly difficult to obtain these lines.
The ECB analysis said, “The simultaneous increase in demand for commercial credit and credit lines by enterprises indicates that they are facing broader working capital pressure. This may be driven by rising investment costs.”
“However, the decline in the availability of credit lines also indicates that banks are becoming more cautious in providing such financing, which may further limit companies' ability to meet short-term capital needs,” the ECB added.
The data shows that in the three months up to September of this year, the proportion of companies reporting obstacles in obtaining bank loans rose from 5% in the previous quarter to 7%.
Cost expectations are heating up, and inflationary pressure has not subsided
The survey also showed that companies' expectations for future prices, wages, and other costs have risen sharply, but the ECB pointed out that since a large number of respondents participated in the survey for the first time, this result was biased.
Companies participating in the last two rounds of surveys expect prices to rise by an average of 3.6% over the next 12 months, up from 2.5% in the second quarter survey.
Looking at the overall sample of all 12,822 companies surveyed, the companies expect sales prices to rise 7.1%, a sharp increase from 3.2% in the previous survey. This set of data shows that although the ECB continues to raise interest rates, corporate inflation expectations are still high, and cost pressure has yet to substantially ease.