Borrowing for mortgages and consumer spending continues to grow at near record rates fuelled by low interest rates.
The latest figures from the Central Bank, released yesterday, show that the annualised underlying rate of growth in residential mortgage lending was 25.9 per cent in May, up marginally from 25.8 per cent in March and April.
The monthly increase, in monetary terms was €1.7 billion, close to the highest ever recorded in July 2004, according to Alan McQuaid, economist with Bloxham Stockbrokers.
Non-residential lending also remained strong, with the annualised rate of growth increasing from 25.4 per cent in April to 25.7 per cent in May.
The strong growth in mortgage lending reflects the general buoyancy of the property market, which in turn reflects the growing consensus that there will be no rise in European interest rates this year, according to Austin Hughes, economist with IIB bank.
"People are still optimistic about the job market and are borrowing to bridge the gap between their current income and expected future income," he said in reference to the strong non mortgage lending numbers.
The lending figures were amongst a array of economic data published yesterday.
The Central Statistics Office (CSO) released balance of payment data for the first quarter of the year.
It recorded a deficit of €1.4 billion due to a fall in the value of exports, prompting Davy Stockbrokers to comment that growth in the first quarter may only have been 3.5 per cent, some way off consensus full year estimates.
