Saturday 10 December 2016

Household debt levels here are now third-highest in the EU

Published 10/05/2016 | 02:30

Irish households are reducing debt at a rapid pace, but remain the third-most-indebted in the European Union, according to Central Bank data
Irish households are reducing debt at a rapid pace, but remain the third-most-indebted in the European Union, according to Central Bank data

Irish households are reducing debt at a rapid pace, but remain the third-most-indebted in the European Union, according to Central Bank data.

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Despite a significant decline in debt as a proportion of disposable income throughout last year - the fastest reduction in the debt ratio in Europe - households are still high up in the league table for the most indebted, with only Denmark and the Netherlands higher.

The Central Bank said household debt as a proportion of disposable income fell in the final months of last year to 155.1pc.

Dermot O'Leary, of Goodbody Stockbrokers, said that was down from 160pc in September and a full 25 percentage points over the year.

"This is by far the fastest reduction in the debt ratio in Europe," he said.

"Despite the improvement in the debt ratio, the Central Bank stresses that it is still the third-highest (in the EU) at the current time. However, given the downward trajectory in the ratio, Irish household debt levels are quickly converging with those of the UK."

The Central Bank also said that household net worth increased by 1.4pc to €626.1bn, or €135,078 per capita, at the end of last year.

Irish Independent

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