Household debt slightly up

Total debt of Dutch households (incl. non-profit institutions serving households) amounted to slightly over 760 billion euros at the end of June 2017, over 3 billion euros more than three months previously. Debt of non-financial corporations declined by almost 2 billion euros to a total of 808 billion euros. Total private sector debt therefore rose slightly on balance over the second quarter. As gross domestic product (GDP) rose more sharply than debts, the debt ratio (i.e. debt as a percentage of GDP) declined, to 218.8 percent. Although this is the lowest level since 2008, it is still far above the threshold of 133 percent which has been set by the European Commission. Statistics Netherlands (CBS) reports this based on new figures on private sector debt.

The increase in total household debt is due to more newly extended than redeemed existing residential mortgages. Non-mortgage consumer debt fell slightly; student loan debts went up, but other non-mortgage debts including consumer loans declined.
The central focus of this news release is on the development of debts in the private sector. Aside from debts, households and businesses also have financial assets (including money, shares and participations) and physical assets (such as property). These assets as well as the collective savings of households (pension contributions) shall not be taken into consideration here.

Household debt rising slightly as of September 2014

After a period of decline, household debts started rising as of September 2014, in particular the level of residential mortgage debt. The latter increased from 649 billion euros at the end of September 2014 to 669 billion euros at the end of June 2017. In the same period, non-mortgage debt rose from 88.5 to 91 billion euros. Student loan debt increased, but other non-mortgage debts including consumer loans declined.

Private sector debt
 Non-financial corporationsHouseholds (incl. non-profit organisations)
2008 I668.1672.7
2008 II682682.5
2008 III687.9691.5
2008 IV680.8701.5
2009 I691.1707.1
2009 II699.1713.9
2009 III701.4719.9
2009 IV687.2726
2010 I690.6729.4
2010 II698.7734
2010 III687.1740.7
2010 IV681.5744.6
2011 I680.9745.8
2011 II684.4749.5
2011 III682.4753.4
2011 IV691.3755.1
2012 I701.9752.7
2012 II709.4755.1
2012 III705.8757.9
2012 IV699.3757.8
2013 I706.1753.3
2013 II705.4750
2013 III710.7749.1
2013 IV716.4742.1
2014 I714.4739.8
2014 II725.8738.5
2014 III727737.7
2014 IV756.9739.7
2015 I810741.5
2015 II815.2742.3
2015 III814747.1
2015 IV789.4748.9
2016 I794750.5
2016 II786.1754.7
2016 III804.6757.9
2016 IV801755.6
2017 I809.3756.8
2017 II807.7760.1

Non-financial sector debt ratio down due to currency movements

Non-financial corporation debt not only includes loans but also debt securities, mainly bonds. These securities are valued at market value. In Q2 2017, the decrease in debts was caused by falling market prices of securities and exchange rate movements. Interest rates in the capital market rose, decreasing the value of bonds. In addition, the euro exchange rate strengthened against other currencies such as the US dollar and the British pound. Foreign currency debts expressed in euros declined as a result. At the same time, businesses took out more loans than were repaid. The balance of loans and securities issued and amounts outstanding was 4.3 billion euros.
Debt levels of non-financial corporations have hovered around 800 billion euros since the beginning of 2015. The sharpest rise was seen in Q4 2014; as of that quarter, cash pools are being recorded as gross overdrafts instead of netted in the National Accounts balances as was the case previously.

Debt ratio of households and non-financial corporations down

Despite increasing debt levels, household debt as a percentage of GDP declined in Q2 2017, because the increase in GDP was stronger than the increase in debt levels. At the end of June 2017, the household debt ratio had declined to 106.1 percent from 106.7 percent in March; the ratio has been falling since Q4 2012.
In Q2 2017, the non-financial sector debt ratio declined from 114.1 to 112.7 percent. Total private sector debt amounted to 218.8 percent as a result, the lowest level since 2008. The private sector debt ratio is one of the indicators used by the European Commission as part of the macroeconomic imbalance procedure (MIP) to monitor a country’s macroeconomic imbalances. The Netherlands’ debt ratio is currently far above the threshold of 133 percent as set by the European Commission.

Private sector debt ratio
 Households (incl. non-profit organisations)Non-financial corporations
2008 I108.3107.5
2008 II108.5108.5
2008 III108.8108.3
2008 IV109.7106.5
2009 I111.3108.7
2009 II113.5111.1
2009 III115.6112.6
2009 IV117.6111.3
2010 I118.3112
2010 II118.2112.5
2010 III118.4109.8
2010 IV117.9107.9
2011 I117.1106.9
2011 II117.2107
2011 III117.3106.3
2011 IV117.4107.5
2012 I117109.1
2012 II117.2110.1
2012 III117.7109.6
2012 IV117.5108.4
2013 I116.5109.2
2013 II115.8108.9
2013 III115.2109.3
2013 IV113.7109.7
2014 I113.1109.2
2014 II112.6110.6
2014 III111.9110.3
2014 IV111.6114.2
2015 I111.2121.5
2015 II110.4121.2
2015 III110119.9
2015 IV109.6115.5
2016 I109.1115.4
2016 II109113.5
2016 III108.7115.4
2016 IV107.5114
2017 I106.7114.1
2017 II106.1112.7