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| 25.01.2012 |
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| Debt Developments in the Economy, November–December 2011 |
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| To view this press release as a WORD file - Click here |
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| Business sector debt increased in November by 1.8 percent to NIS 777 billion. Households' debt increased by 0.5 percent, and at the end of November was NIS 362 billion. |
| The business sector's outstanding debt |
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The total outstanding debt of the business sector increased in November by about NIS 14 billion (1.8 percent), to NIS 777 billion. |
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The increase derived mainly from the depreciation of the shekel against the dollar by about 5.2 percent, which resulted in a NIS 10 billion increase in the value of foreign currency debt in shekel terms. There were also NIS 2 billion in net funds raised through bank loans. |
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In December the business sector (excluding banks and insurance companies) issued about NIS 1.6 billion of bonds, about a third of which was through non-tradable bonds. For the full year of 2011, the business sector issued about NIS 26 billion of bonds, about 78 percent of which were negotiable on the Tel Aviv Stock Exchange (TASE). In the second half of the year, the pace of bond issues by the non-financial private sector declined to NIS 8 billion, compared with NIS 18 billion in the first half. In contrast, bond issues by the financial sector doubled in the second half of the year, to NIS 9 billion. |
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| B. Household debt |
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Households' outstanding debt increased in November by about NIS 2 billion (0.5 percent), and at the end of the month reached NIS 362 billion. |
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Households' outstanding housing debt increased in November by some NIS 1.3 billion (0.5 percent), and at the end of the month it was NIS 257 billion, having increased 8.2 percent from the beginning of the year. |
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In December, new mortgages taken out totaled NIS 3.2 billion, a larger figure than in November, but lower than the monthly average new mortgage volume for the full year of 2011, of about NIS 3.7 billion. For the full year, new mortgages taken out totaled NIS 44.7 billion, a decline of 5.2 percent from 2010. |
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| C. The cost of the debt |
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The spread between interest on credit and interest on deposits in the indexed sector narrowed by 0.6 percentage points in November, as the interest on indexed deposits increased. In the unindexed sector the spread between interest on credit and interest on deposits narrowed by 0.1 percentage points, as the interest on unindexed credit declined. |
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In November, the gap between the yield on indexed corporate bonds (the Tel-Bond 60 Index) and average yields on indexed government bonds widened by 0.5 percentage points, to 2.9 percentage points. Since March 2011 this spread has widened by 1.7 percentage points. |
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The interest rate on new unindexed mortgages fell in December in line with the reduction in the Bank of Israel interest rate. The rate of interest on new CPI-indexed mortgages has been stable in recent months. |
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| For links to Information and Data on the Bank of Israel website: - Click here |
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