Despite the quantitative increase in business sector debt, a
decline in the value of debt denominated in and indexed to foreign exchange and
other factors led to the fact that outstanding business sector debt[1]
declined in the first quarter of 2017 by about 0.5 percent, to about NIS 842
billion. Household debt increased in the first quarter by about 1.3
percent, to around NIS 511 billion.

 

The business sector’s outstanding debt

·        
In the first
quarter of 2017, there was a quantitative increase in business sector debt in
tradable bonds in Israel, bank loans and nonbank loans.  This quantitative increase was offset mainly
as a result of the effect of the 5.5 percent appreciation of the shekel
vis-à-vis the dollar, which lowered the value of the debt denominated in and
indexed to foreign exchange.  A
quantitative decline in loans from nonresidents was also a factor in offsetting
the increase. As a result of these effects, business sector debt declined by
about NIS 4.5 billion (0.5 percent) to around NIS 842 billion at the end of the
quarter.

·        
The increase in
the growth rate of debt to nonbank entities continued, mainly due to an
increase in outstanding tradable bonds in Israel.  At the same time, the decline in the growth
rate of debt to banks continued.

·        
In the first
quarter, the business sector (excluding banks and insurance companies) issued
about NIS 17 billion in bonds, significantly higher than the total issuances in
the previous quarter (NIS 8.5 billion). 
Companies in the real estate and construction industry were prominent
issuers in the first quarter (about 46 percent of total issuances). In April
2017, the business sector issued a total of about NIS 3.4 billion in bonds, mostly
in tradable bonds.

·        
The spread
between yields on CPI-indexed corporate bonds, as measured by the Tel Bond 60
index, and the yield on CPI-indexed government bonds narrowed by about 0.35
percentage points between November 2016 and March 2017. In April 2017 there was
a slight widening of the spread by about 0.04 percentage points, to about 1.12
percentage points.


Household debt

·        
Households’
outstanding debt increased by about NIS 7 billion (about 1.3 percent) in the first
quarter to about NIS 511 billion.

·        
Outstanding
housing debt increased in the first quarter by about NIS 4 billion (1.2
percent), to about NIS 343 billion.

·        
In the first
quarter of the year, new mortgages taken out totaled about NIS 13 billion, lower
than the same period last year (about NIS 15 billion).  In April, the decline in new mortgages taken
out continued, with a total of about NIS 3.7 billion taken out.  Net of seasonal effects, new mortgages taken
out in April totaled about NIS 4.3 billion (Figure 4). 

To Full press release, including graphs and data

Graphs and Data​

[1] In
the first quarter of 2017, a retroactive methodological correction was made to
the “Credit from Abroad” item.  Click here
for more details.

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