Debt repayment problems have ‘severe consequences’ on consumption, paper finds

Central Bank of Estonia: paper analyses impact of debt repayment problems on consumption

Debt repayment issues lead to “substantial” short-term changes in consumption, a working paper published by the Central Bank of Estonia suggests.

In Debt repayment problems: what are the implications for consumption? Merike Kukk investigates the impact of debt repayment problems on consumption in Estonia from 2004–2011.

On average, quarterly consumption measured 30% lower when an individual had debt repayment problems; the longer the problem lasts, the more “severe” the decline in consumption was

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