Saturday 3 December 2016

Household net worth at highest level in six years - Central Bank

Published 08/05/2015 | 02:30

Overall debt has fallen by 22.9pc since its peak in the summer of 2008
Overall debt has fallen by 22.9pc since its peak in the summer of 2008

Household net worth here is at its highest level in more than six years.

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And household debt has fallen by more than a fifth since its peak in mid-2008, according to data from the Central Bank.

The net worth of households now stands at €600.8bn, or €130,331 per capita as of the end of last year.

That represents a rise of 4.3pc on the July to September period. It is now at its highest level since the end of 2008.

Debt is also continuing to fall, dropping to €157bn.

Overall debt has fallen by 22.9pc since its peak in the summer of 2008.

The Central Bank data also showed that the ability of households to pay off their debt has also improved.

Debt as a proportion of disposable income declined by 3.7 percentage points, falling to 170.1pc.

The Central Bank said this was the lowest level since the end of 2005, although it remains high by international standards.

The decline reflects both further reductions in household debt, as well as increases in disposable income.

In its Stability Programme Update, published alongside the Spring Economic Statement last week, the Government warned that the high indebtedness of Irish households could act as a drag on growth over the coming years.

It warned that household indebtedness was high in Ireland compared with other eurozone countries, and speculated that many households may chose to prioritise debt reduction over a hike in personal spending as incomes begin to rise.

Government debt peaked at 123pc of the value of the economy in 2013 and fell to just below 110pc last year. It is projected to drop below 100pc by 2017.

Irish Independent

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