Household debt as a percentage of GDP increased between 2000 and 2008 at an average annual rate of 5.4 per cent compared with 4.7 per cent between 1990 and 2000 (in absolute terms household debt as a percentage of GDP increased from 69 per cent to 104 per cent). Australia's increase in household debt is more than the US (27 per cent change), Britain (32 per cent change) and South Korea (32 per cent change). Unsurprisingly, this increase in absolute debt has led to greater leverage in the household sector, with the ratio of household debt to disposable income increasing from 95 per cent in 2000 to 146 per cent in 2008.
At 13 per cent, Australian government sector debt is very low compared with other developed countries, most of which had government debt to GDP ratios above 50 per cent in 2008 (US and Canada 60 per cent, Britain 53 per cent, Germany 66 per cent, France 73 per cent). In Australia, government debt declined between 2000 and 2008, at an average annual rate of 8.6 per cent. In absolute terms, government sector debt declined 10 percentage points from 19 per cent in 2000 to 9 per cent in 2008, but ticked back up last year to 13 per cent as a result of the government's stimulus package. As the commonwealth budget returns to surplus, deleveraging is likely here too.
At 13 per cent, Australian government sector debt is very low compared with other developed countries, most of which had government debt to GDP ratios above 50 per cent in 2008 (US and Canada 60 per cent, Britain 53 per cent, Germany 66 per cent, France 73 per cent). In Australia, government debt declined between 2000 and 2008, at an average annual rate of 8.6 per cent. In absolute terms, government sector debt declined 10 percentage points from 19 per cent in 2000 to 9 per cent in 2008, but ticked back up last year to 13 per cent as a result of the government's stimulus package. As the commonwealth budget returns to surplus, deleveraging is likely here too.
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