By Stelios Orphanides
Cypriot households and non-financial corporations saw their cumulative debt fall in the first quarter of the year, to 265.4 per cent of economic output, from 268.3 per cent at the end of 2016, the Central Bank of Cyprus said.
Household debt dropped at the end of March, to 121.2 per cent of the economy, from 126.8 per cent three months before, the central bank said in its indebtedness report, issued twice a year. The indebtedness of non-financial corporations dropped to 144.2 per cent, from 147.9 per cent. Bank credit extended to the non-financial sector fell in March to 221.1 per cent, from 225.8 per cent at the end of December.
The net value of financial assets of households fell in the first quarter of the year to 110 per cent of gross domestic product (GDP), from 113.7 per cent three months before, the bank supervisor said. On the other hand, those of non-financial corporations rose to 204.7 per cent, from 202.1 per cent respectively.
The central bank said non-performing loans were declining, after peaking in February 2015. Yet, the pace of reduction has to accelerate to allow banks finance economic growth.