Household loan repayments exceeded drawdowns by €338 million in May, according to new figures released by the Central Bank.

This follows a monthly decline of €405 million decline in April.

Loans outstanding to Irish households declined by 2.9 per cent year-on-year in May. Repayments exceeded drawdowns by just over €2 billion over the 12 months.

Loans for house purchase, which accounted for 82 per cent of total household loans in the month, declined at an annual rate of 2.5 per cent, while outstanding lending for consumption and other purposes fell by €100 million. In terms of non-housing loans, repayments exceeded drawdowns by €844 million year-on-year.

Household loan repayments exceeded drawdowns by €291 million during May, following a monthly decline of €283 million for the previous month. Developments in May were driven predominantly by declines in loans for house purchase, according to the Central Bank. Loans for consumption and other purposes also declined by €100 million during the month.

Household deposits rose by €262 million in May and were almost €1.5billionn higher in the year.

Non-financial corporation (NFC) deposits fell by €71 million in May, following an increase of €1.4 billion in April.

“Last year’s strong GDP numbers and the forecasts for this year would suggest that the private-sector credit figures don’t matter too much, but from a long-term perspective a greater level of credit will need to flow into the economy to maintain the positive momentum we’ve seen over the last year or so,” said Alan McQuaid, chief economist at Merrion.

“Mortgage approvals data are on the rise but the stricter lending rules from the Central Bank as regards house purchases will likely have a negative impact on borrowing. And even with a pick-up in activity, overall bank lending is forecast to remain fairly subdued in 2015, and still well below what the economy needs for sustainable growth in the long-run,” he added.