Debt Developments in the Economy October–November 2013
Business sector debt was unchanged, at around NIS 778 billion, in October. Household debt increased by about NIS 3.4 billion (0.8 percent) to around NIS 407 billion at the end of the month.
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Graphs & Data
Business sector debt was unchanged, at around NIS 778 billion, in October. Household debt increased by about NIS 3.4 billion (0.8 percent) to around NIS 407 billion at the end of the month.
The business sector’s outstanding debt
· The total outstanding debt of the business sector remained essentially unchanged at around NIS 778 billion in October. About NIS 3 billion were raised via tradable bonds and loans from nonresidents and institutional investors, and about NIS 2.9 billion in bank loans were repaid.
· In November, the business sector (excluding banks and insurance companies) issued about NIS 1.9 billion in bonds, most of which were tradable bonds. This is less than the monthly average for the year to date, of about NIS 2.4 billion.
Household debt
· Households’ outstanding debt in October was about NIS 407 billion. The balance of housing debt, which is included in total household debt, increased by about NIS 1.4 billion (0.5 percent), to around NIS 286 billion at the end of October.
· In November, there was a decline in new mortgages taken out, which totaled about NIS 3.7 billion, lower than the monthly average since the beginning of the year of about NIS 4.3 billion.
The cost of the debt
· In October, the yield spread in the unindexed track narrowed from the previous month by about 0.08 percentage points, as the decline in interest on credit balances was greater than the decline in the interest on deposits.
· In the CPI-indexed track, the spread between the interest rate on new bank credit granted and the interest rate on deposits declined in October by about 0.21 percentage points, due to a decline in the interest rate on credit.
· At the end of October, the spread between the yield on indexed corporate bonds—measured by the Tel Bond 60—and average yields on indexed government bonds was 1.24 percentage points, greater than the spread at the end of September which was around 1.17 percentage points. Since December 2012, the spread has narrowed by abound 0.5 percentage points.
· In November, the average interest rate on new unindexed mortgages declined by around 0.09 percentage points.
· The interest rate on new CPI-indexed mortgages increased by around 0.16 percentage points.
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