The Unassuming Economist

From the IMF’s latest report on Slovak Republic:

“Credit growth remained resilient, fueled by mortgage loans, while business lending slowed, and consumer loans contracted (…). Real estate prices continued to rise. With the significant GDP decline in 2020, a non-negligible gap emerged between actual and model-predicted house values though the extent of house price misalignment is difficult to gauge given the unique nature of the shock.

(…)

The macroprudential stance is broadly adequate from a financial stability point of view but there is scope to augment the macroprudential policy mix if housing market imbalances persist. Systemic risk stemming from the housing market, while manageable, has not dissipated. Notwithstanding the tightening of regulatory limits, mortgage credit and real estate prices continue to grow, and housing loans account for an increasing share in banks’ private sector loan portfolio.”