BoM: Household Debt Continues to Rise

The Bank of Mauritius (BoM) has raised concerns about the steady increase in household debt, as noted in its Financial Stability Report for December 2025. However, it emphasizes that there is currently no immediate risk to financial stability.

As of the end of June 2025, household debt accounted for 39.2% of the Gross Domestic Product (GDP). When related to income, it reached 109.5%, indicating a greater reliance on credit, particularly for housing. The total household debt is estimated at Rs 281.1 billion.

The central bank also points out that the cost of loan repayments has increased due to the interest rate hikes implemented in February 2025. By June, debt servicing consumed 17.9% of household income, which limits their capacity for saving and consumption.

Moreover, the BoM has observed a significant increase in foreign currency deposits held by households, which reached USD 1.9 billion, representing 15.4% of total deposits, up from 9.5% in 2019. This trend reflects a desire to protect against economic and monetary risks.

According to the Bank of Mauritius, the combination of rising debt, increasing financing costs, and property prices outpacing income growth could further weaken certain households, particularly the most vulnerable.

The post BoM: Household Debt Continues to Rise appeared first on IONNEWS.