The changeover from national to harmonised monetary statistics

Monetary analyses, which are used as a supplementary tool in economic analyses, include a detailed description of money and credit growth and evaluate its implications for inflation and economic growth. The main variables observed are monetary aggregates and their counterparts in the form of loans, long-term financial liabilities and net external assets of MFIs. Until the end of 2015, most of the data used in the Inflation Report were compliant with national monetary statistics definitions, but at the start of 2016 harmonised monetary statistics – compiled in accordance with the methodological guidelines of the E(S)CB – became the main source for monetary data. Accordingly, the main monetary indicator was changed from the previously used national M2 monetary aggregate to the harmonised M3 monetary aggregate.

There are three main reasons for this decision. M3 is fully harmonised with EU standards, so its use facilitates international comparisons. It is also more “liquid” in its definition than national M2 (see Table 1), as it does not contain long-term time and savings deposits (deposits with maturities of over two years and deposits redeemable at notice of over three months) and, conversely, does contain deposits of local governments and some marketable bond and money market instruments issued by MFIs. It thus enables the transaction motive for holding money to be captured more faithfully over the business cycle. In econometric terms, sufficiently long time series of harmonised aggregates are currently available for analytical and forecasting purposes, so there is nothing to prevent a change to their full use.

Table 1 (BOX) Comparison of harmonised and national monetary statistics
M3 is fully harmonised with EU standards and its definition better reflects the transaction motive of holding money than national M2


Harmonised monetary statisticsa)

National monetary statisticsb)


 Currency + Overnight deposits

 Currency + Overnight deposits


M1 + deposits with agreed maturity up to 2 years + deposits redeemable at notice of up to 3 months

M1 + deposits with agreed maturity + deposits redeemable at notice (all maturities)


M2 + repurchase agreements + money market fund shares + debt securities up to 2 years (issued by MFIs)

Not defined

  1. a)not including central government deposits
    b)not including deposits of general government (i.e. central government, local governments, social insurance funds and health insurance funds)

The differences in the definitions of national M2 and harmonised M3 caused the two aggregates to show different rates of growth in 2006–2011 (see Chart 1). The difference in their growth rates of almost 5 percentage points was a result of differential growth in deposits by maturity, as, unlike deposits with longer agreed maturities, deposits with agreed maturity of up to two years increased in the pre-crisis years and decreased in 2010–2011. In recent years, however, the growth rates of the two aggregates have converged. In November 2015, harmonised M3 rose at an annual rate of 9.6%, as compared to 8.2% for national M2.

Chart 1 (BOX) M2 and M3
The rates of growth of national M2 and harmonised M3 are essentially the same at the moment
(annual percentage rates of growth; differences in percentage points)