Chart of the Day: Households can now own more assets without needing to borrow

The growth of financial assets has been outpacing consumer loans for two years.

This chart from RHB Research shows that Singapore households now own more assets, whilst their need to borrow declines. Household financial assets have been outpacing consumer lending by a significant margin over the last two years.

The growth of financial assets rose from 8.1% in Q3 2017 to almost 9% in the next quarter, whilst growth of consumer loans only played between 5% in the same time period. Consumer loans grew 5.2% YoY to $263.35b in February.

Singapore’s domestic demand growth is seen to more than double to 3.5% in 2018, after showing improvements in the previous year. Private consumption is expected to continue to be a key driver of growth, expanding by 2.6% in 2018.

“Indeed, private consumption was robust in 4Q17, but was narrowly defined by automotive and telecommunications & computer components (likely iPhone X sales),” RHB’s research team said. Moving forward, the phenomenon is expected to continue in 2018 as inflation ticks higher.