Deputy Governor Lawrence Schembri explains how household spending has changed because of COVID-19 and discusses why the Bank expects the recovery to have two phases.
Deputy Governor Lawrence Schembri explains how the COVID-19 pandemic has affected household spending and economic activity, and discusses what the recovery is expected to look like.
COVID-19 presents challenges for indebted households. We assess these by drawing parallels between pandemics and natural disasters. Taking into account the financial health of the household sector when the pandemic began, we run model simulations to illustrate how payment deferrals and the labour market recovery will affect mortgage defaults.