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Irish household indebtedness fell more than 20 times faster than the EU as a whole in 2016, highlighting the extent of the country’s recovery from its debt-induced crisis.
Data from the Central Bank of Ireland show that Sweden – where low interest rates have provoked fears of overheating in the country’s housing market – has overtaken Ireland to become the third-most indebted EU state as a percentage of disposable income.
Household debt as a percentage of disposable income fell by 10.2 percentage points last year to 140.9 per cent, compared to a 0.5 percentage point decline for the EU as a whole.
The central bank said the reduction reflected both a cut in debt and an increase in household incomes.
Debt has fallen by 52.9 percentage points since the end of 2012, compared to a decrease of only 3.3 percentage points for the wider EU.
Ireland’s government was forced to accept an EU-IMF rescue package in 2010, after the bursting of a property bubble caused the collapse of a string of banks.
However, the economy has since rebounded strongly, becoming the fastest-growing in the EU. That has allowed the “bad bank” established to bail out the banks to recoup almost all the money it spent, and encouraged renewed investor appetite for Irish debt.