Australia’s Galloping Household Debt – Distribution Matters

Though relative to nominal GDP, Australia has the second highest level of household debt, HSBC analysts believe the household debt has been rising for fundamental reasons and hence doesn’t pose much worries. Paul Bloxham and Daniel Smith at HSBC in their May 16 research note titled: “Downunder Digest” reckon high household debt concerns should make Reserve Bank of Australia to strike a hawkish tone rather than dovish. So is Australian household debt an issue? And if not, why? Rising Australian household debt force RBA to tighten prudential settings Bloxham and Smith point out the Australia’s household debt is high by…