The problem of ageing population in Singapore and Hong Kong is more serious than we thought
Savings ratio in Singapore now stood at 41% from 48% in 2007 and the story is even worse in HongKong.
From a peak of 34% in 2007, HongKong's savings' ratio is now down to 25%.
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Morgan Stanley notes that apart from weaker export income, both these economies are also approaching a turning point in their demographics where the age dependency ratio (non-working to working age population) is deteriorating.
"The rising age dependency will be a structural headwind for these economies to maintain their level of aggregate saving. Hong Kong’s saving ratio has been declining significantly already over the last few years, leading Singapore; its age dependency trend is leading Singapore’s," it added