Bank of Spain released ([1],[2]) May data on financing to the private sector. A couple of quick observations:

  1. Household mortgage lending deleveraging continued in May, with housing loans dropping a further 1.8bn to 656.8bn. Total lending was slightly more positive because ‘other lending’ actually increased by 0.6bn to 194.7bn.
  2. Non-financial corporations loans dropped significantly, with the loans category decreasing by almost 6bn (more than 0.5% of GDP) to 819.6bn, with the rest of categories (securities, external loans) posting small increases.

Overall, the housing market is still in strong correction mode while the real sector (non-financial corporations) is showing a large contraction (most probably in investment) which should be reflected in GDP data shortly.

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