At the same time, the debt service for new loans taken by households earning minimum to average wage economy-wide went up by 2 percentage points over the last 12 months. Considering that almost 30 percent of the borrowers with housing loans earn minimum to average wage economy-wide, a significant share of households report worrying indebtedness levels in the event of unfavourable developments. Moreover, the access to financing is much more reduced for individuals in the lower quintiles: only 1 percent of the individuals in the first three quintiles took a housing loan (Figure 29). The low interest rates and the granting of loans in lei improved access to financing, but the upward trend in property prices offset these developments. Housing loans show a higher sensitivity to consumer loans, to possible shocks on the interest rate, the income or the exchange rate, given their maturity and the higher amounts taken. In the context of the historically low interest rates seen at present, the main mediumterm risk comes from the impact of future rises in the financing cost on the indebtedness level. The DSTI ratio for housing loans would witness the largest increase in the event of a 2 percentage point interest rate hike (by 5.3 percentage points, Figure 30). By breakdown, the interest rate shock would generate an approximately 10 percentage point advance in the share of debtors with a DSTI ratio above 40 percent.

The global forest acreage has reduced by 40% in the last 300 years. In many countries around the continents, hectares of forests are lost annually, resulting in severe deforestation issues that will leave adverse consequences to future generations. Sustainable development is hence paramount, necessitating financial support, strong political will and fundamental cultural changes to create the necessary enabling environment. Increased awareness for sustainable development is beginning to profoundly change the behaviour of consumers, who are beginning to demand for more green solutions. This trend and awareness has begun to shape preferences for goods and services, as evident from a survey of young adults conducted by the Boston Consulting Group where 73% of respondents stated that green factors are amongst the key considerations in making purchasing decisions. More households and businesses are adopting green lifestyles – a trend that is already well-entrenched in many advanced countries and gaining rapid momentum in several developing economies, including in the ASEAN region. The environmental products and services market globally is estimated to be worth USD1.4 trillion. The growth potential of this market is tremendous. On the financing side, the United Nations Environment Programme Finance Initiative has made important strides, working closely with the financial sector to develop and promote linkages between sustainability and financial performance, and in developing models for best practices including risk management. Financial institutions themselves have taken the initiative to adopt the Equator Principles, where financial institutions commit to channel financing to projects which are both economically viable and environmentally sustainable.