13.10.2022 | Estonia

Household debt up nearly 10% in 2022

Text Mark Taylor
Photo Maria Ziegler / Unsplash

According to data released by Eesti Pank, household debt increased by 9.2 per cent compared to this time last year, and by 2.8 per cent compared to the second quarter of this year (April, May, June).

One of the main reasons behind the increased debt of households in Estonia is the increased lending that took place in the second quarter of this year, which amounted to 285 million euros. To put this into perspective, this figure is almost the same amount as the entire trade deficit of Estonia, and more than the 250 million euros borrowed by the government in the same quarter.

The largest reason for a such huge jump in lending was the result of rapid increases in house and apartment prices, which have risen on average by 64 per cent in the past 12 months. The rapid increase in home prices is one of the main reasons why Estonia’s inflation rate is in excess of 20 per cent and has been the highest in the EU.

Although household debt has risen, government sector debt decreased by 1.8 per cent during the third quarter of 2022. Debt accounted for 16.8 per cent of Estonia’s GDP over the last four quarters.

To learn more about this and similar topics
Debt Debt Estonia Eesti Pank GDP Household Household Debt Lending