Household debt in Cyprus, totaling €19.7 billion, stands at 66% of GDP, while corporate debt amounts to €39.4 billion, with a debt-to-GDP ratio of 133%. Both sectors show a decrease in debt relative to GDP, indicating positive economic growth and diversification in asset holdings.
What is the current state of household and corporate debt in Cyprus?
Household debt in Cyprus stands at 66% of GDP, amounting to €19.7 billion, with a majority of assets held in cash and deposits. Corporate debt is at a debt-to-GDP ratio of 133%, totalling €39.4 billion, showing diversification with significant holdings in equities. Both sectors show a decrease in debt relative to GDP, indicating economic growth.
Understanding Cyprus’s Household Debt
Cyprus’s household debt has reached a significant milestone, standing at 66 percent of the country’s Gross Domestic Product (GDP) by the end of 2023. This figure is representative of the total amount owed by consumers, which emphasizes the economic challenges faced by individuals within the nation. Notably, there has been a marginal decrease in the debt-to-GDP ratio, largely attributable to the island’s GDP growth.
The Central Bank of Cyprus’ (CBC) quarterly financial accounts revealed that by December 2023, household debt amounted to €19.7 billion. Interestingly, this represents a substantial decrease when compared to the situation in December 2016, where the ratio was nearly 50 percent. It’s also reported that of the household assets in financial instruments, which totalled €55.8 billion, a significant 57 percent was held in cash, deposits, and loans.
Corporate Debt Dynamics
Turning to the corporate sector, the CBC’s report highlighted a total of €67.6 billion in non-financial corporations’ assets. The corporate debt at the end of December 2023 stood at €39.4 billion, with the debt-to-GDP ratio at 133 percent. This marked a decrease compared to previous quarters, again primarily due to GDP growth. When contrasted with the figures from December 2016, where the corporate debt-to-GDP ratio was around 78 percent, the reduction is notable.
The composition of corporate assets shows a diversification with 17 percent in cash and deposits, and a notable 45 percent in equities. The remaining assets were distributed between loans, securities, and other financial instruments, reflecting the varied investment strategies of Cypriot companies.
The Financial Landscape for Insurance and Investment Firms
The financial status of various institutions also came under scrutiny in the CBC’s assessment. Insurance companies’ assets in financial instruments were valued at €5.0 billion. These assets were distributed across cash and deposits, loans, securities, equities, and other financial instruments, with equities forming the largest category at 43 percent.
Investment firms in Cyprus possessed financial assets totalling €5.9 billion. A staggering 78 percent of these assets were in equities, demonstrating the sector’s preference for stock investments. They also held a mix of cash, deposits, loans, securities, and other financial assets, albeit in smaller proportions.
Pension Funds’ Investment Portfolio
The condition of pension funds was another area detailed in the report. Investments in financial instruments by pension funds reached €4.2 billion, showcasing a balanced allocation across various asset classes. Equities were the primary holding at 52 percent, followed by cash and deposits, loans, securities, and other financial assets.
The distribution of pension funds’ investments illustrates a strategy geared towards long-term growth and stability, which is essential for securing the future finances of retirees. Such a diverse portfolio indicates a prudent approach to risk management, ensuring that the funds can weather potential market fluctuations.
What is the current state of household and corporate debt in Cyprus?
Household debt in Cyprus stands at 66% of GDP, amounting to €19.7 billion, with a majority of assets held in cash and deposits. Corporate debt is at a debt-to-GDP ratio of 133%, totaling €39.4 billion, showing diversification with significant holdings in equities. Both sectors show a decrease in debt relative to GDP, indicating economic growth.
How has household debt in Cyprus evolved in recent years?
Cyprus’s household debt has decreased relative to GDP, reaching 66% by the end of 2023, totaling €19.7 billion. This shows a positive trend from the situation in December 2016, where the ratio was nearly 50%. The majority of household assets are held in cash, deposits, and loans, amounting to €55.8 billion in financial instruments.
What are some key findings regarding corporate debt in Cyprus?
Corporate debt in Cyprus amounts to €39.4 billion, with a debt-to-GDP ratio of 133%, indicating a decrease compared to previous years. The composition of corporate assets shows diversification, with significant holdings in equities (45%) along with cash, deposits, loans, and other financial instruments. The total assets of non-financial corporations were reported at €67.6 billion.
How are insurance, investment firms, and pension funds faring in Cyprus’s financial landscape?
Insurance companies in Cyprus hold financial assets worth €5.0 billion, with a focus on equities (43%). Investment firms possess assets totaling €5.9 billion, primarily invested in equities (78%). Pension funds have investments amounting to €4.2 billion, with a balanced allocation across asset classes, including equities, cash, deposits, loans, and securities. This diversified approach aims to ensure long-term growth and stability.
