A new report has shown that households in Jamaica are struggling with mounting debt.
According to the 2020 Financial Stability Report, the ratio of household debt to disposable income deteriorated by 10.2 percentage points to 71.5 per cent, relative to 2019.
It was well above the ten-year annual average of 49.3 per cent.
This outturn was due to a faster pace of growth in household debt of 8.7 per cent relative to a 6.8 per cent decline in disposable income.
By extension, other household sector debt sustainability measures also showed a general deterioration in 2020 when compared to the prior year.
Loan quality affected
Meanwhile, the report shows a marginal deterioration in Deposit Taking Institutions loan quality associated with the corporate sector during 2020.
The ratio of corporate sector non-performing loans to total corporate sector loans increased to 1.6 per cent from 1.1 per cent in 2019.
The non-performing loan ratio for all economic sectors deteriorated in 2020 with the exception of agriculture, mining, manufacturing and electricity.
Construction recorded the highest increase in the non-performing loan ratio of 2.5 percentage points while tourism had the least of 0.1 percentage point.
Construction, Professional and Other Services and Distribution accounted for the largest amount of non-performing loans among the economic sectors at 32.9 per cent, 26.6 per cent and 25.4 per cent, respectively.