1 Aug 2012

Increase in household debt

12:25 pm on 1 August 2012

Household debt has increased at the fastest pace in nearly three years as consumer and housing loans picked up.

Reserve Bank figures show seasonally adjusted total household borrowing rose 0.3% to $188 billion in June. That's the highest level since October 2009.

The annual growth in household debt stood at 1.8%, the highest rate since Nov 2010.

Consumer lending also rose for the fourth consecutive month, while agricultural debt growth rose sharply despite declining commodity prices.

Radio New Zealand's business editor reports that some economists say the lift in borrowing by households and firms is further evidence the economy is recovering.

But a return to borrow and spend is being downplayed, with Infometrics saying the rise is subdued, and well-below average growth in the last decade.