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

A household credit boom could tend to drag down economic growth more so than corporate debt, a 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.”