The level of household debt continued to fall in the last three months of 2013, according to figures from the Central Bank, and is now 18.3% lower than its peak in late 2008.

Household debt stood at €166bn by the end of last year, down €2.4bn on the third quarter.

That figure is 4.5% lower than the amount of debt held by households at the end of 2012.

According to the Central Bank, the quarterly decline is largely due to the writing down of debt by banks as well as the reclassification of some household loans.

There was also a €600m net repayment of household debt during the year, according to the regulator.

The continued decline in what is owed to lenders has improved the overall sustainability of household debt.

Debt as a proportion of disposable income fell 3.5% to 191.8% and is down significantly from a peak of 221% recorded in 2010.

However, debt levels still remain high by international standards, with current household debt equating to €36,203 on a per capita basis.

According to the Central Bank figures household net worth continued to rise during the quarter – up 2.9% to €504.2bn.

This has continued a positive trend which began in the third quarter of 2012, however the figure is still well below the peak recorded in late 2007.

Meanwhile, Government liabilities rose by €396m during the quarter, due to a rise in the value of securities redeemed during the period.

Debt held by non-financial corporations as a proportion of GDP also rose – up 4.5% to 218% - largely due to new borrowings.