Chart of the Day: China Isn't Deleveraging (Yet) But Most of Asia Is!

Economist

Richard Iley

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/043/760/original/Screen%20Shot%202018-02-05%20at%205.38.35%20AM.png?1517771610" class="editor-image img-responsive" data-smartkarma-image-id="43760"></figure><div class="content-highlight"><p>Only one Asian economy has seen its total leverage (as a % of GDP) slip since the GFC: India. Using 2008Q3 as the base period, India's total credit to GDP ratio has dipped by 4pp of GDP. As highlighted last week, much of the decline has come over the last year as the combination of festering bad loans and excess industrial capacity combined with the twin demand shocks of de-monetisation and GST roll out crimped bank lending to corporates (see <a href="https://www.smartkarma.com/insights/chart-of-the-day-china-isn-t-deleveraging-yet-but-most-of-asia-is" target="_blank" data-smartkarma-citation="insights:17334">Chart of the Day: China Isn’t Deleveraging (Yet) But</a>…</p></div>

Only one Asian economy has seen its total leverage (as a % of GDP) slip since the GFC: India. Using 2008Q3 as the base period, India's total credit to GDP ratio has dipped by 4pp of GDP. As highlighted last week, much of the decline has come over the last year as the combination of festering bad loans and excess industrial capacity combined with the twin demand shocks of de-monetisation and GST roll out crimped bank lending to corporates (see Chart of the Day: China Isn’t Deleveraging (Yet) But…

Chart of the Day: Only One Asia Economy Has De-Leveraged Since The GFC. Guess Who?