Whatever the cause, in recent years output per hour has only increased at half the rate it did as recently as the mid-2000s. This is cause for concern. Over the first three quarters of 2022, productivity in the business sector has recorded a disappointing decline of 3¾ percent at an annual rate.
Yet, rapid credit growth and asset price bubbles have made regulators worldwide question their domestic micro- and macro-prudential policies to cope, amongst others, with the unintended consequences of the lingering low-interest-rate environment. The loan-to-value ratio, that we recently introduced, aims to contain speculative pressure in our property market, which has been pushing prices beyond their real value.