March saw the first consecutive month-on-month increase in non-mortgage household lending levels since 2008, Central Bank data shows.
In overall terms, when mortgages are included, household lending declined by 3.2% on a year-on-year basis in March, the figures showed.
Mortgage lending alone fell by 2.7% year-on-year.
A €142m increase in loans for consumption purposes, in March, however, marked the largest increase since January 2011 and the first consecutive month-on-month increase for seven years. Household deposit levels decreased marginally, by €32m, compared to February levels, but increased by 0.6%, or €546m, on an annualised basis.
Commentary on the figures remains downbeat, however. According to Alan McQuaid, there is not enough movement in the lending market to really stimulate the economy.
“The underlying problem, at the moment, appears to be as much about the lack of demand for credit as it is about the supply of credit, though, hopefully, this should pick up as the economy continues to regain momentum,” said Mr McQuaid.
“However, the new mortgage lending rules from the Central Bank are likely to dampen demand/supply of credit further, particularly for house purchase, suggesting that overall bank lending will remain subdued in 2015, and still well below what the economy needs for sustainable growth in the long-run.
“The fact is that many Irish consumers are still burdened with a huge level of outstanding debt and are in no hurry to add to that load.”
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