Significant Tightening of Monetary Policy Helps to Dampen Inflation in the Euro Area

The European Central Bank (ECB) continued its monetary policy tightening with further steps in 2023. The balance sheet of the Eurosystem was reduced faster and more strongly than that of the Federal Reserve Bank or the Bank of England. The volume of credit grew slightly more in Austria than in the Euro area, but less so than in 2022. A decline in lending was particularly noticeable in mortgage loans. Despite increased insolvencies, bleak economic prospects, and high interest rates, credit quality remained high. In the face of significant monetary policy tightening and heightened geopolitical risks, the stock markets proved to be very resilient in 2023.