Increased financial vulnerability: Rising household debt levels can lead to greater financial vulnerability, especially in times of economic downturns or rising interest rates.
Pressure on disposable income: High levels of debt can put pressure on households' disposable income, leading to lower levels of savings and reduced spending on other essential items.
Risk of defaults: A surge in households' debt can increase the risk of defaults, which can have broader implications for the overall financial stability of the economy.
Impact on economic growth: Excessive household debt can hinder economic growth by reducing consumer spending and investment, thereby affecting overall economic performance.
Policy implications: Policymakers may need to implement measures to address the issue of rising household debt, such as promoting financial literacy and consumer protection measures.
