Triple threat: Singapore economy at risk from debt, deflation, and deteriorating demographics

Debt-to-GDP ratio is at 251%.

Singapore is vulnerable to the triple threat of rising debt, intensifying deflation, and deteriorating dynamics, a report by Morgan Stanley revealed.

“Weak demographics and productivity dynamic is weighing on growth in the background, while the combination of high debt and deflationary pressures is adding to these pressures of managing the debt and growth dynamic,” stated the report.

The report showed that Singapore’s debt-to-GDP ratio surged to 251% in 2014 from just 174% in 2007. This figure is the third-highest in Asia excluding Japan and the highest in the ASEAN.

Meanwhile. working-age population growth is expected to slip into negative territory after 2020.

Singapore’s consumer price index has been in the red since November, and the central bank has recently adjusted its 2015 inflation forecast to -0.5–0.5% from 0.5-1.5%.