The Bank of Israel published its quarterly update on debt developments in Israel’s nonfinancial private sector, showing total outstanding business and household debt rising by about 2 percent in the fourth quarter of 2024 to around NIS 2.2 trillion. The annual growth rate of outstanding debt increased to about 7 percent, continuing the pickup from the previous quarter after a downtrend that began in the third quarter of 2022, while remaining below growth rates seen in earlier years. Business sector debt increased by about NIS 26 billion (2 percent) to about NIS 1.4 trillion, driven by net debt raised of roughly NIS 32 billion, mainly bank loans concentrated in the large business segment, alongside a positive movement of about NIS 6 billion in tradable bonds in Israel. The rise in outstanding debt was partly offset by a 1.7 percent appreciation of the shekel against the US dollar and a 0.1 percent decline in the Consumer Price Index (CPI), which reduced the value of foreign currency-denominated and CPI-indexed debt; annual business debt growth rose to about 8 percent. Business bond issuance in Israel totaled about NIS 17 billion in the quarter, with around two-thirds issued by construction and real estate companies; issuance in January 2025 was about NIS 6 billion, with construction and real estate accounting for about 57 percent of the total. Household debt increased to about NIS 845 billion, mainly due to housing debt rising by about NIS 13 billion (2 percent) on higher new mortgage volumes, while nonhousing debt edged up about 0.3 percent to NIS 235 billion; corporate bond spreads (Tel Bond 60 versus CPI-indexed government bonds) narrowed to about 1.08 percentage points in Q4 2024 and fell further to about 0.94 percentage points in January–February 2025.

Original source View in tracker