PBOC: To strictly control the leverage of households, as it could weigh on economic growth

Dhwani Mehta FXStreet

A household credit boom could tend to drag down economic growth more so than corporate debt, the latest research paper released by the People’s Bank of China (PBOC) explained.

Key takeaways from the paper

“Researchers say household leverage slowed real per-capita GDP growth by 3.7% in five years.”

“Due to indebted households reducing consumption.”

“And that highly-indebted households are vulnerable to negative income changes.”

“Recommend that policy makers strictly control the leverage of households.”

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Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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