Wealth grows while debt diminishes across Spanish households. The net financial wealth of Spanish families, tracked by ISFLSH, reached 2 trillion euros in the first quarter of this year, marking a 2.9 percent year over year rise, according to the financial accounts released by the Bank of Spain. This reflects a moderation in debt levels and shows a healthier balance for households as a whole. The ratio of debt to gross domestic product dropped to 51.1 percent, down from 56.8 percent a year earlier, signaling an improved debt position in the economy.
The net financial assets of households stood at 147 percent of GDP at the end of the first quarter, down 9.9 percentage points from the prior year, largely due to stronger GDP growth. The combined value of household financial assets and ISFLSH rose by 1.7 percent year over year, reaching a peak of 2.75 trillion euros in the first quarter.
Positive revaluations added 15.3 billion euros, alongside net asset purchases of 31.9 billion euros in the last four quarters. Looking at the composition at the period end, most household financial assets remained in cash and deposits, accounting for 38 percent of the total, followed by equities at 31 percent, mutual fund shares at 15 percent, and insurance and pension funds at 12 percent.
Capital holdings gained share the most among household financial assets, rising by 1.2 percentage points from the previous year, while the weighting of insurance and pension funds decreased by the same margin.
consolidated debt
Consolidated debt for non-financial corporations and households and ISFLSH reached 1.648 trillion euros in the first quarter, down 1.7 percent from a year earlier, yet 2.3 percent higher than the level before the pandemic at the end of 2019. In relation to GDP, the debt ratio eased to 121.1 percent, compared with 135.3 percent in March 2022 and still below the 129.3 percent recorded at the end of 2019.
Debt of non-financial corporations alone fell from 972.3 billion euros in the first quarter of 2022 to 952.7 billion in March 2023. Expressed as a GDP share, this ratio dropped from 78.5 percent in March 2022 to 70 percent at the start of 2023. If intercompany debt is included, the March 2023 rate would stand at 89.9 percent versus 101.5 percent a year earlier.
Household and ISFLSH debt declined from 703.8 billion euros in March to 694.9 billion early in 2023, with the GDP ratio easing from 56.8 percent a year ago to 51.1 percent in the first quarter of 2023.