The International Monetary Fund (IMF) said recently that China is one of the few economies to achieve growth this year, largely due to the rapid growth of household debt.
The agency’s Global Financial Stability Report released this week shows that while corporate debt in developed countries has increased significantly this year, household debt in China and other emerging markets has grown even faster.
The report points out that in the first half of this year, China’s household loan growth was about 13.5%, slightly higher than the growth of corporate loans, and higher than the average growth of other emerging markets. In contrast, the U.S. corporate loan growth was about 17% over the same period, and household loan growth was only about 1%.
Some analysts believe that a large portion of this household debt is being used to purchase real estate, which is contributing to the rapid rebound in real estate investment in China.
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