2015年-CEPS欧洲政策研究中心_A_Convergence_Process_in_Household_Credit_in_Central_and_Eastern_Europe_15页_1mb

Summary of "A Convergence Process in Household Credit in Central and Eastern Europe"

Core Content

This document discusses the convergence process of household credit in Central and Eastern Europe (CEE) in relation to Western Europe, focusing on the impact of economic liberalisation and the 2004 EU enlargement. It explores how household credit levels and growth rates have evolved in CEE countries and how they align with broader economic trends such as GDP per capita and inflation.

Main Points

• Economic Liberalisation and EU Enlargement: The liberalisation of Eastern Europe's market during the 1990s and the 2004 EU enlargement had a significant impact on the CEE economies. These events marked a shift from underdeveloped financial systems and credit markets to more integrated and developed ones.

• GDP per Capita Convergence: CEE countries have experienced a convergence process in GDP per capita, which has been a major driver of household credit convergence. Over the last 20 years, the average real GDP per capita in CEE increased by over 68.6%, significantly outpacing the NEU and SEU regions.

• Household Credit Growth: CEE countries have shown a much higher growth rate in household credit compared to NEU and SEU. In 2014, the average household credit per capita in CEE was only 12.4% of that in NEU, but it had expanded by over 241.9% since 2004, compared to 7.5% in NEU and 23.0% in SEU.

• Impact of Financial Crisis: The financial crisis of 2008-2009 slowed down the convergence process. However, it also led to a stabilisation of the share of foreign currency loans in CEE, which may have increased the stability of credit markets in the region.

• Credit by Type and Maturity: There is a growing trend towards housing loans in the total household credit portfolio across Europe, especially in CEE. The share of housing loans in CEE increased by 17.8 percentage points between 2004 and 2014, from 44.3% to 62.1%, reflecting increased confidence in future repayment capabilities.

• Foreign Currency Loans: CEE countries have a high share of foreign currency loans (39.4% in 2014). This is influenced by factors such as the interest rate spread, presence of foreign banks, and exchange rate regimes. The financial crisis increased the perceived risk of foreign currency borrowing, but the adoption of the euro by some CEE countries has helped stabilise this trend.

• Inflation and Interest Rates: Inflation in CEE has been higher and more volatile than in NEU and SEU. Lower interest rates since the late 1990s have made credit more accessible, and the crisis further reduced nominal interest rates, positively affecting household credit growth.

Key Information

• CEE Population and GDP: CEE accounted for 20.5% of the EU population in 2014 but only 7.4% of the EU real GDP. This indicates a lower level of economic development compared to Western Europe.

• Credit to Households: In 2014, the total credit to households in CEE was significantly lower than in NEU and SEU, but the growth rate was much higher, indicating a convergence process.

• Crisis Impact: The financial crisis led to a contraction in household credit growth across the EU, with CEE countries experiencing large declines. However, the crisis also stabilised the share of foreign currency loans in CEE, potentially reducing future volatility.

• Convergence and Co-evolution: The convergence of household credit and GDP per capita is supported by the literature, suggesting a co-evolutionary relationship between the financial system and economic growth.

• Future Considerations: While descriptive statistics suggest a convergence process, further econometric analysis is recommended to confirm these findings and explore the impact of variables such as interest rates and inflation.

Conclusion

The document concludes that a convergence process in household credit in CEE has been ongoing since the 1990s, primarily driven by GDP per capita convergence. The financial crisis slowed this process but also contributed to greater stability in the credit market structure. Continued monitoring and analysis are necessary to understand the full implications of this convergence for economic sustainability and resilience.