Spaniards run up record debts

21 January 2004

MADRID – Spaniards have built up debts of half a billion euros – the highest rise ever, the Bank of Spain said Wednesday.

The level of debt rose by nearly 15 percent to September last year – which means it is continuously growing.

According to figures published by the Bank of Spain, between January and September 2003, Spanish families increased their debts by EUR 54 billion.

These were principally through mortgages, other loans and unpaid accounts.

But Spaniards had also saved EUR 1.2 billion in savings by the end of September 2003 – an increase in savings of nearly 8 percent compared with the same period in the year before.

Experts said the rise in debts was due to low interest rates and an increase in the price of houses.

The bank said mortgages were by far the biggest components of debts for most Spaniards, they owed EUR 393 billion in unpaid debts on homes. This represented a rise of 16 percent from the year before.

They had also run up EUR 84 billion in unpaid bills – nearly nine percent more than the previous year.

Short-term loans amounted to EUR 24 billion – a rise of nearly 14 percent in 2003 compared with 2002.

In the past five years, the total debts run up by the average family has nearly tripled.

In 1995, they owed EUR 188 billion, whereas last year they owed EUR 500 billion.

At the same time, the financial activities of these families have not even doubled.

The actual increase was from EUR 641 million in 1995 to EUR 1.2 billion last year.

[Copyright EFE with Expatica]

Subject: Spanish news