Bank of Ireland (BOI) announced that its customers increased their debit and credit card spending in January, RTÉ reported today.
The bank reported that the pace of household spending grew by 6.1% in January – up from 4.5% growth in December.
BOI’s consumer spending trend research shows a surge in summer holiday planning, with travel agencies reporting a 50% increase in sales from December.
Airline spending also went up – by an incredible 90%.
Spending on hotels and resorts also increased, by 4.9%, though year-on-year growth in these categories remained modest, BOI noted.
Sports clubs saw almost a quarter (23%) year-on-year rise in spending, which, BOI noted, reflected new year’s resolutions.
However, the impact of January sales was less pronounced, with clothing sales down by 5%, year on year, though electrical items saw a 6.4% increase.
BOI added that November and December are now the most important months for both clothing and electronics sales.
ATM withdrawals decreased by 2%, year on year, in January and now account for 12% of total card spending – down from nearly one third before the pandemic, the bank noted.
‘Encouraging Sign’
Speaking about the findings, the chief economist at BOI, Conall Mac Coille, said, “January’s credit/debit card data, showing nominal spending growth of 6.1%, is an encouraging sign, showing households’ incomes and expenditure are now growing faster than prices.
“Notably, cash withdrawals now account for just €1 in every €10 spent by Irish households – well down from one third just a couple of years ago.”
Mac Coille added that BOI forecasts 3% real growth in consumers’ spending for 2025.
He said, “Several indicators support this optimistic outlook, including employment growth at 3.7%, a low unemployment rate of 4%, and average earnings growth of 5%, which is above the CPI inflation rate of 1.4%.
“Budget 2025 tax cuts – worth 2% of disposable incomes at the average wage – are also expected to bolster consumer spending.”
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