Published on 26 August, 2007. By John Reynolds
Ireland will secure its place at the top of Europe’s personal debt league next year on the 51st anniversary of the founding of the European Union.
Using the Central Bank’s latest figures, it is estimated that the value of our personal debt will overtake the value of all the goods and services we produce on 25 March next year.
As our mortgages, loans and credit card debts continue to soar by nearly 2 per cent every month, it will overtake our GNP “later this year or very early next year,” according to Rossa White, economist at Davy Stockbrokers.
The figure has already hit 90 per cent – the highest in the Euro currency area – according to the Central Bank’s latest Quarterly Bulletin.
On 25 March, 2008, we’ll be €163,735 million in debt, but our GNP will only be €163,677m. While our GNP will grow by 5 per cent this year, it is only set to grow by 4 per cent next year, the Bank says.
This week Britain’s personal debt overtook its GDP – which includes goods and services produced by multinationals – and observers suggest this will happen here as soon as November next year.
If credit card spending hits record levels this Christmas, fuelling a surge in personal debt, then the nation could end up with a bigger collective hangover than ever before in early 2008.