Singapore's economy has managed fairly slow-and-steady growth despite a mediocre global outlook, but high household debt may come back to haunt the city-state.
"Singapore is experiencing extraordinary low interest rates; the danger is that these are inducing unwise spending or investment decisions. Such decisions may be rued when U.S. interest rates rise," said Edward Teather, senior economist for Southeast Asia and India at UBS, in a note this week. "Resident credit to GDP (gross domestic product) is now higher than it was in the late 1990s," when the Asian Financial Crisis struck.
Households in the city-state had liabilities of around 286.39 billion Singapore dollars, or around $229.06 billion, at the end of the second quarter, according to government data. That compares with 2013 GDP of 372.81 billion Singapore dollars.