Growth in lending slowed to its lowest rate in three years in April, according to figures published by the Central Bank yesterday. The monthly credit statistics show private-sector credit grew annually by 22.2 per cent, down from 23.2 per cent March but still high by euro-zone standards, where credit expanded by 10.7 per cent.
Private-sector borrowings rose by €3.6 billion in April, compared with a €4.8 billion rise in March and an average monthly increase of €4.9 billion during 2006.
The figures also reveal that, while still high at 17.1 per cent, annual growth in credit card indebtedness decelerated from 19.6 per cent in March. Growth in lending for house purchase continued a downward trend, growing by 21 per cent, compared with 22 per cent in March.
On Wednesday, the latest Permanent Tsb/ESRI house price index showed national house prices falling in April for the second successive month.
"The effects of rising interest rates on affordability can be seen in the April change in residential mortgages. The month-on-month increase of €1.2 billion was the lowest in over two years," the central bank said yesterday. Total lending to the private sector now stands at €331.8 billion.
Alan McQuaid of Bloxham stockbrokers predicted lending growth would continue to slow, but would remain above euro-zone rates for the foreseeable future. "At this juncture, it looks like we will get at least two more quarter-point rate hikes from the ECB this year, which will continue to impact on credit growth, but not enough to bring it back into single digits or in line with the euro-zone average anytime soon," he said yesterday.
