Debt Developments in the Nonfinancial Private Sector, Second Quarter of 2018
In the second quarter of 2018, the balance of business sector debt increased by approximately NIS 13 billion (1.5 percent), to NIS 903 billion.
Full press release, including graphs and data
The business sector’s outstanding debt
- In the second quarter of 2018, the balance of business sector debt increased by approximately NIS 13 billion (1.5 percent), to NIS 903 billion. The increase was a result of a 3.9 percent depreciation in the shekel against the dollar and an increase of approximately 1.2 percent in the CPI, which increased the value of the debt denominated in and indexed to foreign exchange, and of CPI-indexed debt. The increase in the debt balance was also contributed to by a quantitative increase totaling about NIS 3.6 billion, which was comprised mainly of growth in tradable bonds in Israel, partly offset by a decrease of the debt in nontradable bonds and in debt to abroad. (Figure 1)
- In the second quarter, the business sector (excluding banks and insurance companies) issued about NIS 9.4 billion in bonds, further to the high issuances in the past two years (an average of NIS 12 billion per quarter). There were notable issuances in the quarter by companies in the real estate and construction industry (about 59 percent of total issuances). In July 2018, the moderation in bond issuances by the business sector continued, totaling about NIS 1.6 billion.
- In the second quarter, the spread between yields on CPI-indexed corporate bonds, as measured by the Tel Bond 60 index, and the yield on CPI-indexed government bonds widened by about 0.08 percentage points to about 1.29 percentage points, further to the expansion that began in the end of 2017. In July 2018, this spread continued expanding, to about 1.30 percentage points.
- Households’ outstanding debt increased by approximately NIS 8 billion (about 1.5 percent) in the second quarter of 2018, to about NIS 544 billion. The decline in the annual rate of growth of nonhousing debt, which began at the end of 2016, continues: The balance of outstanding nonhousing debt increased in the second quarter by only about NIS 0.9 billion (0.5 percent), to NIS 195 billion. (Figure 4). Outstanding housing debt increased in the second quarter by about NIS 7 billion (2 percent), to about NIS 348 billion.
- In the second quarter of 2018, new mortgages taken out totaled NIS 14.8 billion, higher than the corresponding period in 2017 (approximately NIS 13.1 billion). In July 2018, there was a relatively high level of new mortgage volume, against a mostly seasonal background, totaling NIS 5.8 billion (Figure 5).
Links to Data and Statistics on the Bank of Israel website: