Households ‘marginally better off’
According to the bank’s latest set of quarterly financial accounts, published yesterday, household net worth increased by 0.9% during the first three months of the year; marking the seventh consecutive quarterly increase. At the end of March, net worth stood at €508.5bn, or €110,312 per capita.
“Increases in household financial assets and the continued reduction in household liabilities contributed towards the rise in net worth during the quarter,” the Central Bank said in a statement.
However, it added: “The rise in net worth, over the quarter, was partly mitigated by a decline in housing assets of €2.1bn. The latter reflected the decrease in national house prices during the first quarter of the year.”
Average household debt fell by €1.9bn, representing a quarterly decline of 1.2%. According to the Central Bank, by the end of March, household debt stood at €164.3bn.
“Household debt sustainability continued to improve during the first quarter. Debt as a proportion of disposable income declined by three percentage points, falling to 182.3%. The decline largely reflected the reduction in household debt and, to a lesser extent, a slight increase in disposable income of €185m,” it said.
“The domestic economy continued to be a net lender during the first quarter, albeit at a much lesser extent than the fourth quarter [of last year],” the bank said. “Over the quarter, the combined deleveraging by households and non-financial corporates outstripped the net borrowing of government.”
Irish-based non-financial corporate organisations remained the second most indebted in the EU, with only Luxembourg outweighing them with a debt-to-GDP ratio of 321%.
“When comparing NFC debt across countries, it is important to note that both Luxembourg and Ireland have substantial multinational corporation activities relative to the size of their economies,” the Central Bank explained.
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