The total debt1 of the private sector2, rose by 42.8 per cent during 2015 to stand at €776.1bn by year-end. The threshold of 133 per cent of GDP, set as part of the Macroeconomic Imbalance Procedure (MIP), was exceeded again in 2015. Figure 8 shows the development of private sector debt since 2005. The contribution from households to total private sector debt, composed mainly of mortgage-related debt, has maintained a steady decline from its peak in 2008 of €202.7bn, falling by €53.1bn in the intervening period. In contrast, non-financial corporate debt grew by 63.0 per cent in 2015 which drove the overall increase in private sector debt. This was driven by debt related to corporate restructuring, both for imports of individual assets and also reclassifications of entire balance sheets in 2015.
|S.11 Non-Financial Corporations||S.14 + S.15 Households and NPISH||MIP Threshold|
The flow of private sector credit (defined as the sum of consolidated transactions in Table 4 Liabilities - AF.3 Debt Securities and AF.4 Loans) was -6.7 per cent of GDP during 2015. As shown in Figure 9, this was within the lower threshold of -14 per cent set under the Macroeconomic Imbalance Procedure. A positive credit flow equates to a net incurrence of debt during the year whereas a negative sign indicates a net running-down of debt during the same accounting period. The negative credit flows occurring in the household sector since 2008, cumulatively amounting to €43.3bn, correspond to a net repayment, primarily, of mortgage related debt.
|Total Credit Flow||Upper MIP Threshold||Lower MIP Threshold|
1Defined as the sum of consolidated stock positions of Table 5 Liabilities - AF.3 Debt Securities and AF.4 Loans.
2Defined as the sum of the S.11 non-financial corporations sector and the S.14 + S.15 households and non-profit institutions serving households sector.