Here's why Singapore households' consumption is among the world's lowest

It's been stuck at 38% of GDP since 2012.

Households are sitting on a massive cash pile, but private consumption as a percentage of gross domestic product is still among the lowest in the world. 

According to a report by Maybank Kim Eng, a key reason behind this paradox is Singapore's intense infatuation with residential property as an investment class, with housing-related expenditure eating up almost a third of household budgets across the city-state.

Consumption as a percentage of GDP has been stuck at 38% since 2012, a far cry from its peak of 45% in 2002. Apart from the drag brought about by household expenditure, high debt is also a key factor behind sluggish consumption.

Maybank Kim Eng noted that household debt has been rising steadily since 2011, with total liabilities now making up 16% of total assets.