Private-sector borrowing grew in April at its fastest rate in more than six years, figures released by the Central Bank of Ireland showed yesterday.
There was a strong acceleration in credit-card borrowing and, when adjusted for technical factors, the rate of growth in total private-sector credit accelerated to 29.6 per cent in April, from 29.4 per cent in March, the fastest rate seen since March 2000.
The latest figures also suggest that the Republic's competitiveness continued to decline in April.
According to the monthly credit statistics, total lending by credit institutions to non-Government Irish residents increased by €4.8 billion in April, up 1.8 per cent on March levels. Total private sector debt now stands at €276.2 billion, some €17 billion higher in December and up €63.5 billion on April 2005.
More than one third of this is due to increases in residential mortgage lending, which grew in April by €1.8 billion, bringing the April total to a new high of €106.4 billion.
At 29.5 per cent, annual growth in mortgage lending remains close to the historically high rate of 29.8 reached in March.
Credit card indebtedness grew annually by 17.3 per cent in the 12 months to April.
This represents its fastest rate of growth since September 2003 and is considerably faster than the 15.5 per cent growth recorded over the 12 months to March.
Underlying the change was a sharp fall in credit-card repayments to €761.9 million from €902 million in March.
In contrast, repayments on business cards remained broadly stable.
In a further sign that the impending release of SSIAs may be impacting on consumer behaviour, the level of overdrafts fell by €42 million.
A rise of 3.6 per cent in the euro's value against the US dollar caused the Central Bank's main competitiveness indicator - regularly updated and published in the Central Bank's credit statistics - to rise by 0.8 per cent, indicating the third successive monthly decline in the economy's competitiveness.
According to the standard M3 measure, which influences European Central Bank (ECB) interest rate decisions, money supply in the Republic grew by 19.7 per cent, more than three times faster than in the euro zone as a whole.
Growing fears about the inflationary effect of borrowing and money supply growth mean that the ECB will almost certainly increase interest rates when its governing council meets in Madrid next Thursday.
