Finland Times

The households' debts have been hiked by continued escalation of borrowing in the year 2012, according to the financial accounts statistics of Statistics Finland.

The households' net financial assets  difference between their financial assets and liabilities, made an upturn, which is mainly explained by rising stock market prices that increased the value of quoted shares and mutual fund shares, said a press release on Friday.

The indebtedness ratio rose to 118.8 percent in the third quarter of 2012 compared to the stipulated period of the previous year.

Although  indebtedness, which accelerated in the previous quarter, slowed down slightly in the third quarter of 2012, households' debts grew by 1.4 per cent during the period, pushing the stock of debts to EUR 131.7 billion. Households' indebtedness ratio is calculated as the ratio of their loan debts at the end of a quarter to their total disposable income during the preceding four quarter.

The net amount of investments in shares and mutual fund shares was very small but the upturn in stock market prices was visible as an increase in the value of assets held by households and the holding gains from shares alone held by households amounted to EUR 1.4 billion. The deposits that had grown by EUR 1.5 billion in the previous quarter remained almost unchanged at EUR 81.0 billion, which represents 36 percent of households’ total financial assets.

During the third quarter of 2012, households' financial assets grew by 1.9 percent amounting to EUR 225.2 billion at the end of the period. As debts only increased by 1.4 per cent, the net financial assets started to grow by 2.7 per cent. Households' net financial assets stood at EUR 93.5 billion at the end of the third quarter of 2012.

Corporations’ net financial assets that had improved in the second quarter of 2012 remained in practice unchanged in the third quarter. At the end of September 2012, non-financial corporations had EUR 187.3 billion more debts than financial assets. Non-financial corporations' debt financing grew by one per cent to EUR 215.4 billion. Debt financing refers to the total of loan debts and financing in the form of debt securities.