Is Singapore’s high household debt to income ratio alarming?

I refer to the article “Household debt: The no-longer-managings” (The Economist, Aug 26).

UK 2008-09 household debt to income ratio 150% 

It states that “On the eve of the financial crash of 2008-09, households were up to their necks in debt. On average they owed 150% of their income, with three-quarters of liabilities in the form of mortgages.

UK household debt to income ratio is now at 135% 

Following the bust, households paid down much of what they owed. After falling to 130% of income, borrowing has more recently risen to 135%, with consumer lending leading the charge.”

S’pore economic growth hampered by high household debt to income ratio?

In this connection, according to the article “Steep household debt is the biggest speed bump ahead for Singapore: report” (Singapore Business Review, Mar 14, 2016) – “A report by ICAEW showed that the pace of consumer spending in Singapore has slowed compared to its long-term average, suggesting that steep household leverage are crimping the city-state’s growth prospects.

S’pore 2016 household debt to income ratio 150%? 

“In our view, consumer debt is probably the greatest danger area. Rising household debt has been prominent in driving up overall private debt ratios in many countries in recent years, and household debt ratios look high in several countries – especially debt/disposable income ratios. Debt/income ratios are close to or above 150% in Singapore and Malaysia and are well above 100% in Thailand,” said ICAEW … the high debt-to-income ratios of close to 150% in Singapore may already be hampering the country’s growth potential,” the report noted”.

UK personal loan % 4% vs S’pore 13%?

As to “In 2012-17 the average advertised interest rate on a £10,000 personal loan fell from 8% to around 4%” – in contrast, the EIR (Effective Interest Rate) of personal loans in Singapore are now at around 13% per annum.


Leong Sze Hian
A.S.S. Contributor

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