Lending falls as focus stays on paying off debt
Published 01/03/2014 | 02:30
HOUSEHOLDS are focusing on paying down debt rather than taking out new loans, figures suggest.
Lending fell again last month, with the biggest drop seen in mortgages.
Repayments exceeded draw-downs, signalling people are either intent on clearing debt before taking on any new loans, or that big-ticket spending has not yet kicked back in.
The Central Bank said lending to households was down 4.1pc in January, which was unchanged from the previous month.
Home loans dropped over the year by 3pc.
Alan McQuaid, of Merrion Stockbrokers, said the data was the most disappointing of Ireland's recovery story.
"Although there has been some improvement in recent months in terms of bank lending, progress is still very slow," he said.
"Advancing credit to the SME sector in particular is essential if the Irish economy and labour market is to fully recover.
"But even lending to the household sector leaves a lot to be desired. Unless this situation is addressed, Irish GDP growth over the next few years will remain well below its potential."
Private sector deposits increased at a rate of 6.9pc last month, following a rise of 8.4pc in December.