Household deposits grew faster in May than at any time since 2007 as consumers sought to shore up their finances while the Government imposed lockdown damaged economic activity.
Central Bank data show household deposits recorded a net inflow of more than €1.5 billion in May. Deposits over the past 12 months are now €10.5 billion higher than withdrawals. This represents the highest annual growth rate, of 9.8 per cent, since 2007.
However, despite consumers showing they were building a financial buffer, they were also willing to spend. Credit and debit card statistics from the Central Bank detail how all sectors across the economy recorded month-on-month increases in May as some restrictions were eased.
The hardware sector recorded a 57 per cent increase in card payments while spending on transport and accommodation rose 19 and 27 per cent respectively in the month. It should be noted that those sectors were almost entirely closed in April.
Both sectors were still down by between 84 and 89 per cent on the year.
Card spending remains down on what it was in May 2019. The total value of card transactions, including ATM transaction, is 25 per cent lower (or off by €1.6 billion) when compared to May last year.
The average spending per debit card transactions in stores was marginally lower in May at €41.97 while the average expenditure on credit cards in stores rose slightly to €61.32 .
Online
Online spending amounted to €1.9 billion in May, a 5 per cent increase from the same month last year. Of that, €1.5 billion was spent on debit cards while the remainder can be attributed to credit cards.
Data up to June 22nd indicate that total card spending remains 4 per cent off the daily average spending figure for June of last year, although the Central Bank said it has been strengthening in recent weeks.
“The strengthening in total spending has been driven by increases in a few specific sectors rather than a broad based rise across all sectors,” the bank said.
Despite a willingness to spend in some quarters, there appeared to be a reluctance to take on new debt. Bank lending to households recorded a net fall of €310 million in May while loans for house purchases declined in net terms by €129 million.
Consumer lending experienced a net fall of €162 million in the month, the third consecutive month of net decreases in consumer credit.
