Delinquency remains at a minimum since 2008 despite the historic rise in the Euribor

Companies and households resident in Spain continue to meet their credit obligations despite the enormous pressure caused by the strong increases in interest rates undertaken by the European Central Bank (ECB) since July of last year.. The ratio of doubtful loans – those in which non-payments have been recorded for more than 90 days – remains at 3.5% of the total credit granted.

This is the lowest level of delinquency since December 31, 2008, when barely three months had passed since the collapse of Lehman Brothers that gave rise to a global financial crisis that mutated in Europe into a sovereign debt crisis.. The bursting of the real estate bubble in Spain was also in its first moments. On that occasion, non-payments began an upward path that reached its most critical point in 2014, with a delinquency ratio that reached around 13.4%, almost four times higher than the current level.

The volume of credit whose collection is doubtful for financial entities stood at 41,774 million euros in July, 400 million less than the previous month. Likewise, the total credit that families and companies accumulate with financial institutions decreased by 11,119 million euros.

The holding of bad debts at minimum levels compared to previous crises is explained by several factors. Firstly, because, unlike what happened after 2008, employment remains at historically high levels and the unemployment rate has fallen to lows not seen in 13 years.. It must be taken into account that, after the burst of the real estate bubble in 2008, unemployment reached 27% in 2013. With more than one in four Spaniards unemployed, the rise in defaults was inevitable.

In addition, it must also be taken into account that families and companies have not yet noticed the full impact of the interest rate increases, which are also expected to remain at high levels at least until the end of 2024.. Mortgages will continue to appreciate for several months yet. With the Euribor already at 4.2%, the forecasts of the main analysts suggest that this indicator will still remain at 3.5% at the end of next year.