Card spending hits record €8.4bn in run-up to Christmas

Total debit and credit card spending, including ATM withdrawals, hit a record €8.4 billion in December as consumers spent more in shops and online in the lead-up to Christmas, according to the Central Bank.

This was the highest spend recorded in this series, which began in January 2015. It was also an 8 per cent increase on the December 2020 period.

Strong growth in the Irish economy is being driven by consumer spending.

Point of sale (PoS) spending was 10 per cent higher in December when compared to December 2020, at €7.2 billion, while ATM withdrawals decreased by 2 per cent, to €1.2 billion.

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Subdued

The Central Bank said ATM withdrawals remain subdued compared to pre-pandemic levels, and were 31 per cent below December 2019 figures.

Total online expenditure stood at €3 billion in December, a decrease of 10 per cent from the previous month. The Central Bank said online spending accounted for 42 per cent of overall PoS spending in December, while total in-store spending rose to a record high of €4.2 billion in December, an increase of 10 per cent, or €382 million, compared to the previous month.

On a sectoral basis, retail spending increased by 8 per cent in December compared to November. “A number of seasonal aspect contributed to the monthly increase, such as increased spending in preparation for Christmas,” the regulator said, noting this is particularly visible in the 14 per cent, or €195 million, increase in spending on groceries when compared to November. Spending on clothing also increased by 14 per cent, or €61 million, in monthly terms.

Spending on services decreased by 10 per cent compared to the previous month, with the majority of sectors experiencing monthly contractions.

Separate Central Bank data show household deposits, a proxy for savings, increased by €11.3 billion to €136 billion last year as consumers continued to save more during the pandemic.

Savings

However, the figures suggest the level of saving may have moderated in the latter half of the year in line with the easing of restrictions.

While deposits from households increased by €1.3 billion in December, there was a negative net flow of €1.4 billion the previous month.

The Central Bank has predicted strong growth of nearly 9 per cent this year on the back of a rapid resurgence in consumer spending linked in part to the unwinding of excess savings.

The regulator’s figures show net lending in annual terms increased by €661 million, or 0.8 per cent, last year “continuing the positive growth recorded in recent months”.

This contrasts with the 12 months to December 2020, where annual net lending fell by €81 million, or minus 0.1 per cent, it said.