Nora Szentivanyi and Joseph Lupton take stock of the rise in household (and overall private sector) debt service ratios in the wake of the sharp rise in interest rates since 2021-22 and discuss what to expect from here. While the projected increases in DSRs this year look manageable on the whole, there is significant variation across countries: the most interest rate-sensitive are seeing a faster pass-through; differences in leverage and the size of rate hikes also matter. Whereas many in DM have yet to see a significant rise in DSRs, the bulk of EM’s rise is likely behind us as EM central banks started hiking earlier and are already shifting towards rate cuts even as DM remains in tightening mode.

Speakers:

Nora Szentivanyi, Global Economic Research

Joseph Lupton, Global Economic Research

This podcast was recorded on July 6, 2023.

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