June 13, 2019 / 12:40 PM / 4 months ago

UPDATE 1-Canada Q1 household debt-to-income ratio edges down, still near record level

(Adds details of release, background)

OTTAWA, June 13 (Reuters) - Canadian household debt as a share of income, a measure closely watched by policy makers, slipped to 173.0% in the first quarter from 173.7% in the fourth quarter but is still near record levels, Statistics Canada said on Thursday.

Statscan revised the fourth quarter down from an initial 174.0%. The all-time high is the 173.8% recorded in the third quarter of 2017.

The Bank of Canada is particularly concerned about the levels of household debt and whether Canadians will be able to cope when interest rates increase.

On a seasonally adjusted basis, households borrowed C$20.2 billion in the first quarter, down from C$20.6 billion in the preceding quarter. Mortgage borrowing rose to C$13.2 billion from C$12.3 billion.

The debt service ratio, which measures debt principal and interest payments as a proportion of income, edged up to 14.9% - the highest since the fourth quarter of 2007.

Reporting by David Ljunggren Editing by Chizu Nomiyama

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