Irish household debt still among the highest in EU

Seven years after the devastating financial crisis Irish people continue to be among the most indebted in Europe.

That was one of the main findings of a Central Bank report published yesterday that provided a snapshot of the financial accounts of households and companies at the end of June this year.

The figures also show most of the fall in the household debt load was accounted for by repayments. Only a relatively small amount —€400m — was written down or written off by lenders in the latest quarter.

Reflecting rising home prices and mortgage repayments, household net worth increased to over €600bn. Only Denmark and the Netherlands have more elevated levels of household debts than here.

Irish households have debts equivalent to just over 167% of their disposable income — compared with a eurozone average of just over 90%. Sweden, the UK, Portugal (another to emerge from a bailout), Finland, Spain, Belgium, Greece (still in recession), France, Austria, Germany, Italy, Croatia, Czech Republic, and Slovenia all have lower household debt burdens than Ireland.

Households in Portugal and Greece carry debts of over 115% and 95% of disposable income respectively.

The household debt burden, which totalled €203.7bn at its peak in 2008, now stands at €153.2bn, equivalent to €33,056 for every person in the State.

Household debt fell in the quarter — and most was accounted for by repayments, with only €400m accounted for by write-downs or writeoffs.

Company debt levels also remain high here, though the large numbers of multinationals based in Ireland can obscure the real picture.

Debts of so-called non- financial firms, which excludes banks, fell to 193.8% of GDP from 185.4% of GDP in the previous quarter.

Taken together, Ireland’s private sector debts have fallen but remain very high at almost 262% of GDP.