Thu, 30 Mar 2023

Swedish households' unpaid debts hit record high

27 Jan 2023, 02:05 GMT+10

STOCKHOLM, Jan. 26 (Xinhua) -- The ongoing inflationary pressures and increasing interest rates pushed up the unpaid debts owed by Swedish households to record highs last year, the Swedish Enforcement Authority said on Thursday.

At the end of 2022, the outstanding debts owed by individuals totaled 101 billion Swedish kronor (9.9 billion U.S. dollars), the government agency in charge of debt collection said in a press release.

This was 7 billion kronor more than in 2021 and represented a 34 billion kronor increase over a decade.

"Increased living expenses generally contribute to higher over-indebtedness. Those who already are in a tough financial situation and have small margins become over-indebted more easily," Davor Vuleta, an analyst at the authority, said in the release.

"A large part of the increase is due to debts constantly growing due to interest, but it's also due to us collecting more debts for higher amounts," Vuleta added.

Year-on-year inflation in Sweden was 12.3 percent in December, Statistics Sweden said on Jan. 13.

To combat inflation, the Swedish central bank (Riksbank) has since May last year implemented four policy rate hikes to currently 2.5 percent after more than seven years of zero and sub-zero policy rates.

In its latest Monetary Policy Report released in November, the Riksbank said that further rate hikes could be expected. (1 Swedish krona = 0.098 U.S. dollar)

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