Lending to consumers and businesses in Ireland declined again last month, according to new figures from the Central Bank.

The data show lending to households fell at an annual rate of 4.7 per cent in May, after dropping by 4.6 per cent in April.

This saw household lending fall by €449 million last month following a decline of €570 million in April. Last month's decline was attributed to a €262 million fall in loans for property purchases.

Mortgage lending declined 2.1 per cent in May compared to the same month a year earlier, while lending for other purposes was down 13.6 per cent.

Loans for consumption purposes fell by €156 million in May, compared to a €341 million decline the previous month.

Lending to businesses was down 2.6 per cent in the 12 months to the end of May, following a 2.3 per cent decline in April.

Corporate lending declined by €87 million during May, following a sharp decline of €708 million the previous month.

The Central Bank figures also reveal an 8.7 per cent annual decline in private sector deposits in May, compared to a 9.1 per cent fall for the year 12 months to the end of April.

Last month there was a €752 million outflow of deposits, due predominantly a €709 million fall in household deposits during May.

Household deposits with agreed maturity of up to two years increased by €217 million last month. Short-term savings deposits fell by €383 million over the same period.

The amount borrowed by financial institutions from the Central Bank as part of Eurosystem monetary policy operations fell by €3.8 billion to €102.3 billion last month, the figures show.

The Irish Times reported last month that Irish banks have been receiving a temporary boost from the National Treasury Management Agency (NTMA), which has placed €19 billion of bailout funds on deposit with them.

The deposits began to be lodged with AIB, Bank of Ireland, Irish Life & Permanent and EBS in January.

The move has meant the four banks' reliance on funding from the Central Bank and the European Central Bank, has been reduced.

Bloxham chief economist Alan McQuaid described the latest Central Bank figures as disappointing.

"The bottom line is that we are still a long way from where we want/need to be to get the economy moving again.

“The reality is that until the banking sector crisis is fully resolved and things improve on the labour market front then the supply/demand for credit will remain subdued in our view, severely hampering the recovery prospects for the economy as a whole in the process."