INTO THE UNKNOWN: A REVISED ESTIMATE OF THE DEBT SERVICE RATIO FOR THE CZECH REPUBLIC

Kód výsledku v IS VaVaI

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Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

INTO THE UNKNOWN: A REVISED ESTIMATE OF THE DEBT SERVICE RATIO FOR THE CZECH REPUBLIC

Popis výsledku v původním jazyce

Czech household debt is currently not as high as in the most developed countries in the world, but its dynamics have been noticeable in recent years. This paper aims to calculate the Debt Service to Income (DSTI) ratio of Czech households and assess how it will evolve in the future. Using the modified BIS methodology and EU-SILC data, we compute our measure of DSTI. We found that the traditional measurement methodology overestimates household income and underestimates interest paid. Thus, the DSTI indicator is higher. We also find that even a relatively small change in interest rates can significantly increase the DSTI. This is particularly important for Czech households taking out mortgages with low interest rates and short fixation periods. Once the fixation period ends, they may find it challenging to repay the mortgage or reduce their consumption, which may have adverse economic consequences.

Název v anglickém jazyce

INTO THE UNKNOWN: A REVISED ESTIMATE OF THE DEBT SERVICE RATIO FOR THE CZECH REPUBLIC

Popis výsledku anglicky

Czech household debt is currently not as high as in the most developed countries in the world, but its dynamics have been noticeable in recent years. This paper aims to calculate the Debt Service to Income (DSTI) ratio of Czech households and assess how it will evolve in the future. Using the modified BIS methodology and EU-SILC data, we compute our measure of DSTI. We found that the traditional measurement methodology overestimates household income and underestimates interest paid. Thus, the DSTI indicator is higher. We also find that even a relatively small change in interest rates can significantly increase the DSTI. This is particularly important for Czech households taking out mortgages with low interest rates and short fixation periods. Once the fixation period ends, they may find it challenging to repay the mortgage or reduce their consumption, which may have adverse economic consequences.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50200 - Economics and Business

Projekt

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Návaznosti

N - Vyzkumna aktivita podporovana z neverejnych zdroju

Rok uplatnění

2021

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Proceedings of the International Scientific Conference ECONOMIC AND SOCIAL POLICY

ISBN

978-80-87291-29-0

ISSN

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e-ISSN

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Počet stran výsledku

9

Strana od-do

1-9

Název nakladatele

Vysoká škola PRIGO

Místo vydání

Havířov

Místo konání akce

Čeladná, Česká republika

Datum konání akce

7. 9. 2021

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

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