Household credit continued to decline in May, and loans to companies also fell, new data from the Central Bank said.

On an annual basis, loans to households fell by 3.9 per cent, compared with a decline of 4 per cent in the year ending April.

The decline in May was largely driven by a €242 million decline in loans for house purchases, and the sector showed a 2.5 per cent annual drop compared with April.

Lending for other purposes fell by €44 million last month, with loans for consumption increasing by €21 million.

Companies also saw credit decline over the year, with a 2.1 per cent fall in the year ending , with loans dropping by €338 million on a monthly basis.

Short-term loans rose by €68 million, but medium and long-term credit facilities fell by €301 million and €105 million respectively last month.

The figures also showed the decline in resident private sector deposits slowed from April, falling by 3 per cent over the year. In the previous month, the rate of decline had been 3.4 per cent.

Households saw the deposit level edge lower, by 0.3 per cent, while company deposits fell by 3.3 per cent. Deposits from insurance corporations and pension funds and other financial intermediaries were 7.9 per cent lower.

On a monthly basis, deposits were down €69 million, with household and company deposits rising by €48 million and €43 million. That was offset by a €160 million decline deposits by pension funds and financial intermediaries.