Cyprus private debt standing at 206 per cent of GDP

Private debt in Cyprus, including households and non-financial companies, reached 206 per cent of GDP at the end of the third quarter of 2023, according to a report released this week by the Central Bank of Cyprus (CBC).

The report included detailed insights into the economic dynamics, highlighting the distribution of assets and debts within households, non-financial companies, insurance companies, investment institutions, and pension funds.

Examining household finances, totalling €57 billion as of September 2023, 57 per cent comprised cash, deposits, and loans, 2 per cent in securities, 22 per cent in shares, and 19 per cent in other financial assets.

Despite the substantial asset base, household debt amounted to €19.9 billion, reflecting a debt ratio of 68 per cent of GDP.

This showed a marginal decrease from the previous quarter, primarily influenced by the concurrent increase in GDP.

However, it should be noted that the household debt index has witnessed a significant drop since December 2016, falling by 68 per cent between then and the end of the third quarter of 2023.

Shifting the focus to non-financial companies, with assets totalling €66.5 billion, 19 per cent was in cash and deposits, 4 per cent in loans, 0.5 per cent in securities, 46 per cent in shares, and 31 per cent in other financial assets.

The sector’s debt, amounting to €40.2 billion, resulted in a debt ratio of 138 per cent of GDP, indicating a slight decrease from the previous quarter.

Notably, the debt ratio for non-financial companies had significantly decreased, dropping from 73 per cent in December 2016.

Turning to insurance companies, their assets in financial instruments were reported at €4.8 billion, distributed as 8 per cent in cash and deposits, 2 per cent in loans, 28 per cent in securities, 43 per cent in shares, and 18 per cent in other financial items.

At the same time, investment institutions held €6 billion in financial instruments, allocated as 5 per cent in cash and deposits, 16 per cent in loans and securities, 76 per cent in shares, and 3 per cent in other financial assets.

According to pension funds, they disclosed investments of €4.1 billion in financial instruments, mostly in cash and deposits (18 per cent), loans (15 per cent), securities (7 per cent), shares (50 per cent), and other financial assets (10 per cent).