The debt ratio drops by 30% for households and by 57% for non-financial companies | Stockwatch


Debt as a percentage of gross domestic product (debt ratio) for households has fallen by nearly 30% and for non-financial corporations by 57% over the past five years, the Central Bank said in a statement, regarding quarterly financial accounts it published on Monday.

In concrete terms, household holdings of financial assets at the end of December 2021 amounted to 57.9 billion euros, of which 61% concerned cash, deposits and loans, 2% concerned securities, 20% equities and 17% other financial instruments. Their debt amounted to €20.1 billion at the end of December 2021, with the relevant debt ratio standing at 86% of GDP, down slightly from the previous quarter due to GDP growth. However, compared to December 2016, the household debt ratio shows a significant drop of up to 30%.

Similarly, the corresponding assets of non-financial corporations amount to 65.7 billion euros with a ratio of 17% in cash and deposits, 5% in loans, 1% in securities, 48% in shares and 29% in other financial instruments. The sector’s debt at the end of December 2021 amounted to 36.2 billion euros with a debt ratio of 155% of GDP, registering a slight decrease compared to the previous quarter mainly due to GDP growth. However, compared to December 2016, the debt ratio of non-financial corporations shows a significant drop of up to 57%.

The assets of insurance companies also show a slight increase which, in terms of purely financial instruments, amounts to 4.3 billion euros and is distributed as follows: 11% in cash and deposits, 3% in loans , 24% in securities, 49% in shares and 14% in other financial data.

The investment funds have assets in financial instruments of 8.2 billion euros respectively invested at 5% in cash and deposits, 13% in loans and securities, 80% in shares and 3% in other financial instruments.

Investments in financial instruments by pension funds amounted to 3.9 billion euros and mainly concern cash and deposits at the rate of 26%, 15% in loans, 3% in securities, 44% in shares and 11% in other financial instruments.

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John A. Bogar