Debt Developments in the Economy, February–March 2014
Business sector debt increased by 0.3 percent to around NIS 779 billion in February. Household debt declined by about NIS 1.3 billion (0.3 percent) to around NIS 409 billion at the end of the month.
- The total outstanding debt of the business sector increased by NIS 2 billion (0.3 percent) to around NIS 779 billion in February. The increase derived from net debt raised, the result of about NIS 2.1 billion raised via tradable bond issues, which were partly offset by the repayment of loans to abroad. For the year to date, there has not been a marked change in the business sector’s bank debt.
- In March, the business sector (excluding banks and insurance companies) issued about NIS 0.5 billion in bonds, all of which were tradable bonds. This figure is the lowest in the past one and a half years, after the record issuance figure in the previous month.
- Households’ outstanding debt declined by about NIS 1.3 billion (0.3 percent) to about NIS 409 billion in February. The decline derived from about NIS 0.9 billion in debt repayment, as well as the impact of the decline in the CPI. The balance of housing debt, which is included in total household debt, was essentially unchanged at around NIS 289 billion.
- In March, there were about NIS 4.5 billion in new mortgages taken out, greater than the figure for February.
The cost of the debt
- In the CPI-indexed track, the spread between the interest rate on new bank credit granted and the interest rate on deposits widened in February by about 0.07 percentage points, due to an increase in the interest rate on credit and a decline in interest on deposits.
- At the end of February, the spread between the yield on indexed corporate bonds—measured by the Tel Bond 60—and average yields on indexed government bonds was 1.22 percentage points, lower by around 0.06 percentage points than the spread at the end of January.
- In March, the average interest rate on new unindexed mortgages declined by around 0.18 percentage points, against the background of the decline in the Bank of Israel interest rate in February. The interest rate on new CPI-indexed mortgages declined by around 0.06 percentage points.
For links to Data and Statistics on the Bank of Israel website: