Citizen Debt — Bank of Israel Issues Alarming Statement
The Bank of Israel released data for the second quarter of 2026, showing that the total debt of the private non-financial sector rose by 3.6% to a record 2.6 trillion shekels. Corporate sector debt increased by 4.2% to 1.7 trillion shekels, while household debt grew to 935 billion shekels.
The Bank of Israel published data for the second quarter of 2026, which recorded a record increase in the debt of the private non-financial sector. Total debt rose by 3.6% to approximately 2.6 trillion shekels. In the corporate sector, debt increased by 4.2% to 1.7 trillion shekels, mainly due to net borrowing of about 79 billion shekels, primarily through direct bank lending. Lending growth was directed to the financial services, real estate, and construction sectors. The annual rate of corporate debt growth accelerated to 13.8%, and bank debt grew by about 19% year-on-year. The corporate sector also resumed activity in the bond market, issuing new securities worth about 33 billion shekels, half of which were in June. Real estate and construction companies accounted for 52% of all issuances. The change in the cost of debt was influenced by a 1.3% rise in the consumer price index and an appreciation of the shekel by about 5.9% against the dollar. Household debt rose to approximately 935 billion shekels, an increase of 2.4%. Non-housing consumer debt grew by 3.6% to 260 billion shekels, with an annual growth rate reaching 10%. Mortgage debt increased by 1.9% to 675 billion shekels, with an annual rate of about 7%. During the quarter, new mortgages worth about 29 billion shekels were issued, and the Bank of Israel reported that a similar pace was maintained in July-August 2026, with an average volume of about 10 billion shekels per month.