Irish households still carry high debts

Only households in Denmark and Netherlands continue to carry heavier debt burdens than those in Ireland, despite falls in indebtedness here, Central Bank figures published yesterday showed as the economic recovery picks up pace.

Irish households still carry high debts

The country’s households between them owed €154.6bn — equivalent to a debt of €33,530 for every one in the State —in the first three months of the year.

That figure is, however, down by €3.7bn, marking the largest quarterly reduction since the height of the financial crisis in 2010 and is being largely driven by so-called deleveraging, where households continue to pay off debt without taking on more liabilities such as housing loans.

The data showed that debt write-downs or write-offs amounted to €1.7bn in the quarter, while debt repayments accounted for €1.6bn.

The Central Bank said overall household debt has dropped by over 24% since peaking at €454bn in late 2008, on the eve of the financial crash.

But Ireland remains at the top of the household debt table in Europe, in third place after the Netherlands and Denmark, as the most debt-ridden.

Sweden, the UK, Portugal, Finland and Spain follow Ireland in the debt league.

Slovenia, Czech Republic, Poland, Croatia and Italy carry comparatively light debt burdens. Germany, Austria and France’s household debts are also below the eurozone average.

The Central Bank’s ‘Quarterly Financial Accounts’ also showed that a key economic marker for the country, debt sustainability, also increased in the early part of the year.

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