Debt build-up worries Central Bank
Monday, 12 July 2004
The Governor of the Central Bank has warned that if the rate of credit growth in the economy continues to increase at its current rate, Ireland could become one of the most indebted countries in the euro area within a few years.
Speaking at the publication of the bank's annual report this morning, John Hurley also repeated its concern about house price growth. He said there was a risk of a 'significant correction' if prices continued rising at the current rates of 12-13%.
The latest statistics show that in the year to May, there was an increase of 27.5% in residential mortgage lending. The rate of private sector credit growth in Ireland is four times the euro zone average.
The bank expects the economy to grow by just over 4% this year. This is a percentage point higher than previously forecast.
But it warns that the success the economy has had in attracting foreign investment could be undermined if inflation were to pick up again.
The annual report shows that the Central Bank paid a surplus of €321.7m to the Exchequer in 2003.
- Business Today: Brendan Gavin of the County Meath Money Advice and Budgeting Service (MABS) says enough people aren't taking heed of warnings that they need to put money by for 'a rainy day'
- Business Today: Hurley also said he was concerned about continuously rising house prices
- Business Today: Central Bank Governor warns on debt
- News At One: John Hurley, Governor of the Central Bank, says Ireland is doing well in terms of growth and employment, but insists increased borrowing could become a major concern
- 6.1 News: Colin Hunt, Economist with Goodbody Stockbrokers, shares the Central Bank's concern over increased debt among Irish people
- 6.1 News: Robert Shortt, Business Correspondent, reports on the Central Bank's concern over increased debt due to property prices
- 6.1 News: Central Bank chief outlines concern over increased debt
- 1 News: Robert Shortt, Business Correspondent, analyses the Central Bank's Annual Report
