Household debt now stands at €172.3bn, which is €31.5bn less than the peak of €203.8bn in the last three months of 2008.
Households paid down €1.6bn of debt over the first three months of this year. Household debt as a proportion of disposable income only changed by 0.1% however to 197.3% because incomes also fell.
Household net worth decreased by €1.8bn or 0.4% of the overall amount to €463.7bn or €101,117 for each person in the country at the end of March. The reduction in household wealth mainly reflects the slump in house prices.
Government debt increased by €14.5bn to €228.9bn on the back of further funds released under the EU/IMF programme and issuances by the NTMA. The Government’s net financial wealth fell by €3.9bn over the first quarter and now stands at minus €140.5bn. Overall, financial wealth has reduced by €139.2bn since the fourth quarter of 2007.
Irish corporates — excluding financial institutions — saw their debt levels fall by €1bn to reach €318bn for the three months to the end of March. This was the third consecutive quarter of corporates paying down debt. “Irish non-financial corporations were the second most indebted in the EU during Q1 2013. Luxembourg had the most indebted non-financial corporation sector amounting to 565% of GDP. When comparing non-financial corporation debt across countries, it is however important to note that both Luxembourg and Ireland have substantial multinational corporation activities relative to the size of their economies,” said the Central Bank.
During the boom years, Irish SMEs in particular took on a huge amount of debt to invest in property. Last April, Central Bank director, Fiona Muldoon, in a speech, said that there could be up to €25bn of impaired SME loans on the balance sheets of the banks.