, Singapore

Chart of the Day: Singapore has one of the highest savings rate in the world

Rate is pegged at 24%.

According to Barclays, despite Singapore’s higher level of household debt to GDP, they believe Singapore households are more defensive than Hong Kong households in the event of liquidity outflow and potential asset quality deterioration of the consumer book. 

This is because of Singapore’s high savings rate, access to CPF funds to repay housing debt and high proportion of liquid household assets (in currency and deposits).

Here's more from Barclays:

Singapore has one of the highest savings rates in the world at 24%, behind China and India, which arguably have less developed social security systems and pension schemes.

In comparison, Hong Kong’s savings rate is only 14%. As a result, we believe Singaporeans are better positioned to better tap into accumulated wealth to repay debt.

While property assets account for the bulk of household assets (49% of total), the proportion of liquid assets, namely cash and deposits, continues to rise and accounted for 19% of total household assets in Singapore in 2013.

Household cash and deposits relative to household debt has risen from 0.8x in 2002 to 1.2x, implying that households have a much stronger capacity to repay debt with liquid assets.

Singapore’s strong liquidity household assets to debt position provides an additional buffer to a potential debt servicing problems in the event of an economic downturn or when interest rates rise, in our view.

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