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The following is a summary of developments in nonfinancial private sector debt[1] in the fourth quarter of 2024:

 

  • In the fourth quarter of 2024, the balance of nonfinancial private sector debt (both business and household) increased to approximately NIS 2.2 trillion (2 percent). The annual growth rate of outstanding debt increased to about 7 percent, further to an increase in the previous quarter, and following a downward trend that began in the third quarter of 2022. This rate is lower than the growth rates recorded in previous years.
  • The balance of business sector debt increased by about 2 percent (about NIS 26 billion) during the fourth quarter, to about NIS 1.4 trillion. This was mainly due to net debt raised, mostly via bank loans, which were concentrated in the large business segment, and debt raised through tradable bonds in Israel.
  • Bond issuances in the business sector in Israel totaled about NIS 17 billion during the fourth quarter, higher than the quarterly average of the previous four quarters. About two-thirds of the bond issuances in the quarter were by companies in the construction and real estate industry, which continues to lead bond issuances similar to previous years.
  • The balance of household debt also continued to increase during the quarter, to about NIS 845 billion, mainly due to an increase in the balance of housing debt (about NIS 13 billion, 2 percent), which was due to new mortgage volume from banks. The balance of nonhousing debt also grew, by about 0.3 percent, to NIS 235 billion.

 

 

The nonfinancial business sector’s[2] outstanding debt

  • In the fourth quarter of 2024, the balance of business sector debt increased, by about NIS 26 billion (2 percent), to about NIS 1.4 trillion. The increase in the debt balance this quarter derived from significant net debt raised totaling about NIS 32 billion, further to the high debt raised in the previous quarter, and were made up mainly from bank loans, which were concentrated in the large business segment. Regarding tradable bonds in Israel, there was also a positive movement of about NIS 6 billion in the fourth quarter. The increase in outstanding debt was partly offset by an appreciation of the shekel by about 1.7 percent against the US dollar and by a decline of 0.1 percent in the CPI[3], which reduced the value of debt denominated in and indexed to foreign currency.
  • Due to these effects, the annual rate of growth of outstanding business sector debt continued to increase in the fourth quarter as well, to about 8 percent, following the downward trend since the second half of 2022. This was reflected in both bank and nonbank debt (Figures 1 and 2).
  • In the fourth quarter of the year, the business sector issued about NIS 17 billion in bonds, higher than the quarterly average of the previous four quarters (about NIS 15 billion). About two-thirds of the issuances in the fourth quarter were carried out by companies in the construction and real estate industry, which continues to lead in bond issuances, similar to previous years (Figure 3).

In January 2025, companies from the business sector issued bonds totaling about NIS 6 billion, similar to the monthly average in the third quarter. Companies from the construction and real estate industry accounted for about 57 percent of funds raised in January.

  • In the fourth quarter of 2024, the spread[4] between yields on corporate bonds that are included in the Tel Bond 60 Index and the yields on CPI-indexed government bonds narrowed to about 1.08 percentage points, and it continued to decline in January–February 2025 to about 0.94 percentage points, a level relatively lower than the past three years (Figure 4).

 

[1] Data on debt to banks are based on monthly balance sheet figures and not on the annual financial statement figures, because as of the date this notice is published, the 2024 financial statement data have not yet been published.

[2] Israeli firms, excluding banks, credit card companies, and insurance companies.

[3] CPI-indexed balances are calculated according to the known CPI on the date the financial statements are published, so that a change in the CPI refers to the change between the known CPI and the CPI of the preceding month.

[4] The change in the spread from one quarter to the next is calculated as the difference between the average spread in the final month of the reviewed quarter and the average spread in the final month of the previous quarter.