Household Debt-To-Income Ratio Improved At The End of 2022
GAINS IN DISPOSABLE INCOME OFFSET AN UPTICK IN CREDIT MARKET DEBT
Courtesy of Barrie 360 and Canadian PressPublished: Mar 14th, 2023
Statistics Canada says the ratio of household debt to disposable income improved in the fourth quarter as gains in disposable income offset an uptick in credit market debt.
The federal agency says on a seasonally adjusted basis household credit market debt as a proportion of household disposable income edged down to 180.5 per cent in the fourth quarter, compared with 184.3 per cent in the third quarter.
The reading means there was $1.81 in credit market debt for every dollar of household disposable income.
The improvement in the fourth quarter came as household disposable income increased three per cent while household credit market debt edged up 0.8 per cent.
The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose slightly to 14.33 per cent in the fourth quarter of 2022 compared with 14.24 per cent in the third quarter.
The latest national balance sheet figures from Statistics Canada show interest payments expanded 14.1 per cent in the fourth quarter compared with the previous quarter. Compared with the same period a year ago, the agency says interest payments rose an unprecedented 45 per cent in the fourth quarter.
Patricia is the Business Mentor and owner of Grow Vantage and a Past President of the Barrie Chamber of Commerce. She applies over 30 years of business experience (from start-up to corporate) to mentor entrepreneurs. Since 2011, she has held over 6,500 coaching and training sessions in-person and online. Through Ask For Directions Training, her entrepreneurial training program (and parent company Grow Vantage), and as a business coach, she works with start-ups who are new (or who have lost traction) to design, launch and grow their businesses. Along with 20 other expert instructors she teaches strategies in marketing, sales, communications, and finance, as well as practical techniques to increase productivity, and manage their businesses. In other words, everything entrepreneurs need to learn to grow and run their businesses successfully, and avoid the costly mistakes they can't even see coming - that lead to delays in growth and getting stuck.
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