Singapore’s Soaring Household Debt

The wealthy Southeast Asian nation Singapore has seen soaring household debt levels in recent years as low interest rates have led to a borrowing spree, prompting the government to step in to curb demand.

This island state, which is an important financial hub, has among the highest level of household borrowing relative to gross domestic product (GDP) in Asia at 77 percent, rising from around 64 percent in 2007. Home loans, which account for around three quarters of household debt, have grown rapidly in recent years together with a booming property market.

Now with bond yields beginning to climb – the 10-year Singapore government bond yield has risen to 2.5 percent from 1.4 percent in May – concerns are growing over whether there is a debt bubble in the making.


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