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Statistics Canada says the ratio of household debt to disposable income improved in the fourth quarter as gains in disposable income offset an uptick in credit market debt.

The federal agency says on a seasonally adjusted basis household credit market debt as a proportion of household disposable income edged down to 180.5% in the fourth quarter, compared with 184.3% in the third quarter.

The reading means there was $1.81 in credit market debt for every dollar of household disposable income.

The improvement in the fourth quarter came as household disposable income increased 3% while household credit market debt edged up 0.8%.

The household debt service ratio, measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income, rose slightly to 14.33% in the fourth quarter of 2022 compared with 14.24% in the third quarter.

The latest national balance sheet figures from Statistics Canada show interest payments expanded 14.1% in the fourth quarter compared with the previous quarter. Compared with the same period a year ago, the agency says interest payments rose an unprecedented 45% in the fourth quarter.