S'pore Q2 household debt at 77% of GDP
[SINGAPORE] Fanned by easy money, household debt in Singapore has shot up to 77 per cent of gross domestic product since the 2008-09 global financial crisis, according to a report by Bank of America Merrill Lynch.
But don't panic. The report, written by the bank's economist, Chua Hak Bin, says that despite concerns that leverage has reached alarming levels and pose a systemic threat, the risks are under control "with signs of leverage stabilising in recent quarters".
The higher gearing ratio, which jumped from 66 per cent of GDP at end-2007 to 77 per cent in the second quarter of this year, was encouraged by easy global monetary conditions and low interest rates - thanks to the US Federal Reserve's quantitative easing - that led to some releveraging of Singapore's household balance sheet, the report says.
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