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Eamonn Farrell/Photocall Ireland

Ireland's household debt dropped by €2.4 billion in three months

New figures from the Central Bank show we’re paying down debt at the fastest rate since 2012.

THE LEVEL OF household debt in Ireland fell by €2.4 billion during the last quarter of 2013, which was the largest decline in debt since the same period in 2012.

The overall figure for our indebtedness now stands at €166 billion, or €36,203 per capita.

The debt writedown was largely composed of loan reclassifications and write-downs, which also covers the sale of loan portfolios, which added up to €1.8 billion of the €2.4 billion total.

Household net worth was also on the rise, climbing by 2.9 per cent during Q4 2013. It now stands at €504.2 billion, or around €109,771 per capita. This was mainly driven by a €8.7 billion jump in the value of housing assets, as well as reductions in liabilities and improving values of financial assets.

The indicators of household debt sustainability also “significantly improved”, with debt as a proportion of disposable income declining by 3.5 per cent, which is the lowest it has been since Q3 2006.

Non-financial corporation debt, which largely relates to domestic businesses and SMEs, increased as a percentage of GDP by 4.5 per cent, largely driven by new borrowing. Irish NFCs are the second most indebted in Europe.

Sold: NTMA sells €1 billion worth of Irish government debt>

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