HOUSEHOLD BORROWING continued to decline in May and loans to companies also fell, according to new data from the Central Bank.

On an annual basis, loans to households fell by 3.9 per cent, compared with a decline of 4 per cent in the year ending April.

The decline in May was largely driven by a €242 million fall in loans for house purchases, and the sector showed a 2.5 per cent annual drop compared with April.

Lending for other purposes fell by €44 million last month, with loans for consumption increasing by €21 million.

Companies also saw credit decline over the year, with a 2.1 per cent fall in the year ending May, with loans dropping by €338 million on a monthly basis.

Short-term loans rose by €68 million, but medium- and long-term credit facilities fell by €301 million and €105 million respectively last month.

The Central Bank figures also showed the decline in resident private-sector deposits slowed from April, falling by 3 per cent over the year.

In the previous month, the rate of decline had been 3.4 per cent.

Households saw the deposit level edge lower, by 0.3 per cent, while company deposits fell by 3.3 per cent.

Deposits from insurance corporations and pension funds and other financial intermediaries were 7.9 per cent lower.

On a monthly basis, deposits were down €69 million.

Household and company deposits rose by €48 million and €43 million, but that was offset by a €160 million decline in deposits by pension funds and financial intermediaries.

Commenting on yesterday’s figures, Alan McQuaid of Merrion Stockbrokers said the bottom line was that Ireland remained a long way from where it needed to be as regards credit demand and availability to get the domestic economy moving again.