Irish household debt decreases €0.2bn in second quarter

Irish households remain the fourth most indebted in the EU, according to new figures from the Central Bank.

The quarterly financial accounts show household debt was largely unchanged at €148.4 billion during the second quarter of 2016.

This represented a decline of less than €0.2 billion, and was the lowest quarterly fall in household debt since the fourth quarter of 2008, when households first began to reduce debt.

The Central Bank said household debt as a proportion of disposable income fell over the quarter from 151.3 per cent to 150.4 per cent.

The net worth of households increased 0.9 per cent to €633.9 billion, driven by a rise in financial and housing assets. Household net worth per capita now stands at €135,622.

Household investment in financial assets rose to €1.9 billion during the second quarter of this year. The Central Bank said the increase in financial assets over the quarter largely reflected transactions into shares, other equity and insurance technical reserves.

Compared to a post-crisis low of €454.1 billion during the second quarter of 2012, household net worth has risen 39.6 per cent. However, it is still 11.7 per cent lower than its pre-crisis peak of €718 billion in the second quarter of 2007.

Government debt fell €5.1 billion, or 2.1 per cent, to €231.2 billion in the second quarter of this year. The decrease in debt was primarily as a result of a decline in long-term debt securities issued by government as debt redemptions exceeded issuance during the quarter.

Government net financial wealth decreased by €3 billion over the quarter as government assets fell by more than government liabilities.