Private credit by deposit money banks and other financial institutions to GDP (%)

This indicator measures the ratio of private sector credit extended by deposit money banks and other financial institutions relative to the nation's GDP, providing insights into the financial health and credit accessibility within the economy. It employs a specific deflation technique, calculated as the weighted average of credit volumes adjusted for consumer price index (CPI) fluctuations, ensuring that inflationary effects do not skew the data. Sources include the IMF’s International Financial Statistics, which provide comprehensive figures for credit, GDP, and CPI. A rise in this ratio can signal increased financial intermediation and economic growth potential, while a decline may point to credit tightening or economic contraction, highlighting its pivotal role in assessing financial stability and development in varied economic contexts. Source: