Household debt service risk turns for the better late in 2012, but remains high

FNB’s Household Sector Debt-Service Risk Index Declined Slightly In The 4th Quarter Of 2012

According to the FNB Household Debt-Service Risk Index, the vulnerability of the country’s household sector when it comes to being able to service its debt in future declined (improved) slightly in the 4th quarter of 2012. From a 3rd quarter 2012 index level of 6.59 (on a scale of 1 to 10), the 4th quarter saw a slight decline to 6.55. This comes after a rising trend spanning 5 consecutive quarters prior to the 4th quarter.

However, it must be said that the level of the Household Sector Debt-Service Risk Index remains high, well-above the long term (33 year) average level of 5.2, and at current high levels it would be preferable to be seeing further declines in the coming quarters. [Read more..Click Here]