Financial conditions are supporting the upswing
Housing and equity prices have increased significantly in recent years, while interest rates are exceptionally low. Based on a structural vector autoregressive model, these factors, combined with credit growth, are overall estimated to have contributed 0.3-0.5 percentage points per year to year-on-year GDP growth since 2016. In recent years, the contribution has been at its highest level since prior to the financial crisis in 2008. Financial conditions are expected to continue to stimulate economic growth during the 2018-20 forecast period.