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What the numbers say: Loans to households and non-financial organizations in France were worth more than double the country's GDP in 2022. Among EU countries, France has the highest volume of loans as a share of its GDP, whereas Poland has the lowest at 20.9% of its GDP. Relevance: Increases in a country's level of household indebtedness can boost economic growth in the short term. However, a 2017 study by the International Monetary Fund (IMF) found that high household debt to GDP ratio over an extended period can negatively impact a country's economic growth. In 2022, total household debt in the U.S. reached $16.9T and household debt accounted for 66.4% of the country's GDP. Brands that should care: A 2019 study by the Netherlands Bureau for Economic Policy Analysis found that household consumption was negatively impacted by high levels of debt. Retailers that sell internationally may benefit from considering household debt when adjusting pricing strategies. Lower prices may encourage higher spending in countries where consumer spending is under more pressure. |
