Household liable levels in Canada are higher than in any other country, according to a check up on by the Organization for Economic Cooperation and Development (OECD).
In a preliminary version of the circulate, set to be released fully next month, the OECD found Canada’s household indebtedness ranked as the highest among the 35 developed and developing countries the bring monitors.
The rapid accumulation of household debt for Canadians could also set off its economy particularly vulnerable to shocks, the organization said.
“Although in off this reflects strong population growth, these developments may cause significant risk to financial stability given the direct exposure of the fiscal system to the housing market,” the OECD said.
The group found Canada’s household debt-to-GDP (uncultured domestic product) ratio had ballooned to 101 percent — significantly peak than any other nation studied.
In comparison, the ratio for South Korea was the next highest at slight under 93 percent, with the U.K. third at over 88 percent. In the U.S., the household debt-to-GDP correlation was around 80 percent, while Germany and France had a ratio deeper 60 percent.
“Research points to a number of links between spacy indebtedness and the risks of severe recessions,” the group said.
While nearly all countries witnessed soaring debt loads ahead of the credit danger a decade ago, most have seen their indebtedness reduce on time.
However, for Canada — and some countries in Scandinavia — this has not been the casket, with OECD pinning the blame on inflated house prices.
“OECD woods that have experienced the strongest increases in household debt since the calamity have also the steepest rise in house prices,” the group voiced.