Net worth of Irish households on the rise
Central Bank says households saw wealth increase by 1 per cent in the last quarter of 2012
Irish households are getting richer again - Central Bank. Photograph: Sean Gallup/Getty Images
Irish households are getting richer, according to the Central Bank, with the net worth of households increasing by 1 per cent to € 461.6 billion in the last quarter of 2012. This means that the average wealth of an Irish household now stands at € 100,674, having risen for the second consecutive quarter.
The Central Bank’s quarterly financial accounts for the fourth quarter of 2012 also show that the debt burden is in decline, with household debt to disposable income, an indicator of debt sustainability, falling to 201.6 per cent, its lowest level since the fourth quarter of 2006. In addition, household debt as a proportion of total assets also fell during the fourth quarter, down to 27 per cent.
Government liabilities rose again during Q4 2012, reaching € 214.4 billion. This represented an increase of 1.4 per cent or € 3 billion, and was largely due to further funding of € 2.8 billion received as part of the EU/IMF bail-out programme. As of the end of 2012, the total value of EU/IMF loans stood at € 57.9 billion.
Private sector non-consolidated debt fell “significantly” in the quarter, down by 16.4 per cent to stand at 289.9 per cent of GDP. This represents the largest decline to date and shows that private sector debt is now at its lowest level since the second quarter of 2009.
The decline in debt was due to a reduction in both household, and business debt, with households cutting their debt to 2.2 per cent of GDP, and businesses, excluding financial institutions, to 14.2 per cent of GDP. According to the Central Bank, the reduction in debt outstanding amongst the corporate sector “largely reflected the relocation of some multinationals”.