Household debt continues to fall despite inflation and interest rate increases, reaching 49.9% of GDP in the second quarter of the year, falling below 50% for the first time in least twenty years.
According to data published this Tuesday by the Bank of Spain, household debt stood at 717.7 billion euros in the second quarter, compared to 703.2 billion euros in the same period of 2022.
The GDP ratio was 55.6% a year ago, so there has been a decline of 5.7 points in twelve months. It also falls by two tenths compared to the first quarter, when it stood at 51.1%.
The bank executives themselves, including the CEO of Santander, Héctor Grisi, and that of BBVA, Onur Genç, have insisted that Spanish households are reacting to the increases in interest rates by paying off their mortgages more quickly.
The current percentage of GDP is the result of a gradual reduction since 2009. That year, the ratio was 85%, a percentage that decreased until reaching 57% before the pandemic, in 2019. Since then, part of household savings has continued to go to reduce debt.
Put in perspective, the recovery of family economies is back to the levels seen at the beginning of the century. In 1996, its debt was 200 billion euros, 43% of GDP, but in just eight years it tripled in percentage terms, reaching 74% in 2004.
In the second quarter, company debt has also been reduced, which has gone from 74.8% of GDP in the second quarter of 2022 to 66.6% in the same period of 2023, or from 963,000 million euros to 939,000 million.
The result of these two deleveraging is that private debt, that is, the sum of that of companies and households, is now 116.5% of GDP, when just a year ago it stood at 130.4%. The debt of companies has decreased by 24.3 billion and that of households by 13.9 billion.
The gross financial wealth of households also stood at 2.05 trillion euros in June, which represents an increase of 6.1% compared to a year before. As a percentage of GDP, net financial assets represented a
145.5%, a ratio 4.6 lower than that of a year before. In this case, the decrease was due to the increase in GDP, indicates the Bank of Spain.
